Century Paper & Board Mills Limitedcenturypaper.com.pk/admin/annual_report/Annual_Report_2014.pdf · DuPont Analysis Statement of Value Added 22 24 26 29 38 ... Price earning ratio

Annual Report

2014

Century Paper & Board Mills Limited

C l e a n - G r e e n - S u s t a i n a b l e

The Company by making the strategic capital

expenditures years after years, continuously

enhance the wealth of its Shareholders. In line

with the above, the Company is embarking

on an investment of Rupees 3.2 billion on

18 Megawatt Coal Based Co-Generation

Power Plant. The work on this project has

already been started during the year. It will be

the stepping stone for long term solution of

energy for the Company.

Contents

0304050711131417

Vision and Mission

Core Values

Certificationsand Awards

Code of Ethics

Year at a Glance

CorporateInformation

Notice of Annual General Meeting

Milestones

2021

DuPont Analysis

Statement ofValue Added

222426

2938

SummarizedSix Year Data

Financial Performance

Horizontal and Vertical Analysis

Chairman’s Message

Directors’ Report

40 Auditors’ ReviewReport on Statementof Compliance

41 Financial Statements

Shareholding Pattern

Form of Proxy

Statement of Compliance with the Code of Corporate Governance

28

86

Environment policyAt Century, we make our best possible efforts to:

• Ensureenvironmentfriendlyoperations,productsandservices.

• MitigateenvironmentalimpactsthrougheffectiveimplementationofISO14001inordertoachievingconformancetoapplicablelawsandregulations.

• Promoteenvironmentalawarenesstoallemployeesandthecommunity.

• Establishobjectivesandtargetsforcontinualimprovementinresourceconservationbywastecontrolandsafeoperatingpractices.

Century Paper & Board Mills Limited2

Annual Report 2014 3

To be the market leader and an enduring force in the paper, board and packaging industry, positively influencing and providing value to ourstakeholders,societyandournation.

To strive incessantly for excellence and sustain our position as a preferred supplier of quality paper, board and packaging material within a team environment and with a customerfocussedstrategy.

Vision

Mission

Core Values

Seek room for innovation in all our ideas, practices,

products & services.

Innovation

Facilitate process centric thinking to continually improve,

correct, and overcome difficulties.

ContinuousImprovement Mindset

See changeas an opportunity.

Change

We Strive for Excellence

Reach out to othersthrough humility &

compassion.

Humility & Compassion

Let integrity guide all our decisions.

Integrity

Deliver unmatched customer centric

experience.

Customer Centric

We are Ethical in all our Actions

Operate with a sense of urgency in everything

we do.

Sense of Urgency

Use teamwork to multiply our collective energies.

Teamwork

We Deliver Customer

Satisfaction

OurValue

s


Code of EthicsOurcorebusiness is tomanufacturepaper,paperboardand packaging products to provide local businesses andindividualsqualityproductsofinternationalstandard.Weare very strong believer of the fact that Ethics and GoodPractices play a vital role in advancement and betterment oftheCompany.Tosupportourbelief,weendeavorourbesttofollowtheseethicalandgoodpractices.

Corporate GovernanceWeasaresponsiblecorporatecitizenstronglyadheretoCorporate Governance principles and comply with regulatory obligations enforced by regulatory agencies for improving corporate performance. We believe inuprightness of performance and expect it to be a fundamental responsibility of our employees to act in the Company’s best interest while holding confidentialinformation.Weexpectouremployeestoneithersolicitinternal information from others nor disclose Company’sfigures, data or any material information to any unauthorizedpersons/body.

Human Resource DevelopmentWe believe in individual respect and growth. Ouremployment and Human Resource policies develop individuals without race, religion, gender or any other discriminative factors. We provide equal opportunitieswith a team based management style employing incessant training and development programs for employees. These continuous improvement policiesenhance efficiencies and knowledge and create a constructiveandaffirmativeenvironment.

Transparent Financial PoliciesWe develop fair and transparent financial policies forconducting business. We ensure transparency andintegrity and follow the principles of accounting and finance as approved by regulations and contemporary accounting codes. Any unsupportive or false entry,infringement of accounts for individual or company gain isstronglyincoherentwithourbusinesscodesandethics.

Marketing and Industry PracticesWebelieveinfreeandfairbusinesspracticesandopencompetitivemarkets.Developinganyassociationwithinthe segment, industry or with competitors to distort the pricing and availability is contradictory to our business

codeof conduct.Any anti-trust activity such as pricefixing, monopolization or forming cartel of suppliers is prohibited.Ourmarketingpoliciesarecustomerfocussed,placing high values in satisfying their requirements with emphasisonquality,serviceandproductdevelopment.As a long term marketing strategy we vision to diversify and add value to our products while maintaining close liaisonswithmarkets,customersandtheirneeds.

Business Risk ManagementOur risk management policies are geared to enhanceshareholders worth, improve credit worthiness and minimize credit risk while diversifying income, supplier and customer bases and maintaining relationships with financialinstitutions.

Social and Community CommitmentsWebelieveincommunitydevelopmentwithoutpoliticalaffiliations with any persons or group of persons working for gains. We contribute our resources forbetterenvironmentwithanunprejudicedapproach.OurSafety, Health and Environment (SHE) policies are geared towards unbiased employees’ betterment.Our positivecontribution towards Community Related Services especially in health and education adds to economic development.

Environmental Management System - EMSWe invest in environmental projectswith environmentfriendly policies to improve Health and Safety standards of employees, communities and surroundings. OurEMS continuously improves in light of advancement in technology and new understandings in Safety, Health andEnvironmentalscience.Wearedrivingtowardszerowaste generation at the source and materials will be reused and recycled to minimize the need for treatment ordisposalandtoconserveresourcesandenvironment.Weareworkingfortheconservationofnaturalresources,energy and biodiversity by continuously improving our processes,practicesandproducts.


Highlights of 2014

Net Sales (Metric Tons)

170,225

Net Sales(Rupees in million)

14,668

EBITDA (Rupees in million)

2,441

Market Value per share (Rupees)

53.30Earnings per share

(Rupees)

3.46

Equity (Rupees in million)

5,745

Market Capitalization (Rupees in million)

7,836

Gross Profit (Rupees in million)

2,021Profit after Tax(Rupees in million)

630


Year at a Glance

Key Figures Rupees in million

2014 2013

Gross sales 17,132 16,513Net sales 14,668 14,236EBITDA 2,441 3,007Profit pre tax 914 1,407Profit post tax 630 929Share capitalOrdinaryshares 1,471 1,060Preference shares 901 2,103

Shareholders' equity 5,745 5,819Total assets 13,179 13,275Capital expenditure 257 311Capital employed 10,536 10,784Long-term financing 4,130 4,425

Key Ratios 2014 2013

Earnings per share - Rupees 3.46 5.30Breakup value per share - Rupees 32.94 35.05Price earning ratio 15.41 5.10Total debt equity ratio 50 : 50 50 : 50Leverage ratio 1.29:1 1.28:1Current ratio 1.41:1 1.59:1Quick ratio 0.31:1 0.46:1Asset coverage ratio 2.12:1 2.09:1Interest coverage ratio 2.49:1 3.03:1Debt servicing coverage ratio 2.68:1 1.79:1Debtors days 23 25Inventory days 66 58


Entity Ratingof Century Paper & Board Mills Limited

Long-Term A+Short-Term A-1JCR-VIS Credit Rating Company Limited Rating as on June 2014

Rating Type Rating Comments

Long-Term A+(APlus) • GoodcreditQuality. • ‘A’ratingsdenoteexpectations

oflowcreditrisk. • Protectionfactorsareadequate. • Riskfactorsmayvarywith

possible changes in the economy.

Short-Term A-1(AminusOne) • Highcertaintyoftimelypayment.

• Liquidityfactorsareexcellentand supported by good fundamental protection factors.

• Riskfactorsareminor.

Quality Policy• CenturyexcelsinmanufacturingofqualityPaper,PaperboardandCorrugatedBoxesforpackaging.

• Century, a customer focussed Company, is always ready to accept challenges for achieving its mission.

• Century’s qualityobjectives aredesigned forenhancingcustomer satisfaction andoperationalefficiencies.

• CenturyiscommittedtobuildingSafe,HealthyandEnvironmentfriendlyatmosphere.

• Century, with its professional and dedicated team, ensures continual improvement in quality and productivitythrougheffectiveimplementationofQualityManagementSystem.

• Century values the social and economic well being of its partners and strives for a harmonious environmentconducivetoteamperformance.


Board of Directors

Iqbal Ali Lakhani (Chairman)Zulfiqar Ali LakhaniAmin Mohammed LakhaniTasleemuddin Ahmed BatlayShahid Ahmed KhanKemal ShoaibMuhammad Imran Rafiq-Nominee Director (NIT)AftabAhmad(ChiefExecutiveOfficer)

Committees Advisor

Officers

Board of Directors

ChiefFinancialOfficerSyed Ahmad AshrafEmail:[email protected]

Company SecretaryMansoor AhmedEmail:[email protected]

Audit CommitteeKemal Shoaib (Chairman)Zulfiqar Ali Lakhani Amin Mohammed LakhaniTasleemuddin Ahmed Batlay

Human Resource and Remuneration CommitteeZulfiqar Ali Lakhani (Chairman)Tasleemuddin Ahmed BatlayAftab Ahmad

Sultan Ali Lakhani

Iqbal Ali Lakhani (Chairman)

Zulfiqar Ali Lakhani

Amin Mohammed Lakhani

Tasleemuddin Ahmed Batlay

Shahid Ahmed Khan

Kemal Shoaib

Muhammad Imran Rafiq (NIT)

Aftab Ahmad (ChiefExecutiveOfficer)


Corporate InformationHeadOfficeandRegisteredOfficeLaksonSquare,BuildingNo.2,Sarwar Shaheed Road,Karachi-74200,Pakistan.Phone: (021) 35698000 Fax: (021) 35681163, 35683410Email:[email protected]:www.centurypaper.com.pk

LahoreOffice14-Ali Block, New Garden Town,Lahore-54600,Pakistan.Phone: (042) 35886801-4 Fax: (042) 35830338

Mills62 KM, Lahore-Multan Highway, N-5,DistrictKasur,Pakistan.Phone: (049) 4511464-5, 4510061-2Fax: (049) 4510063

External AuditorsBDOEbrahim&Co.Chartered AccountantsEmail:[email protected]

Shares RegistrarFAMCOAssociates(Private)Limited8-F, Next to Hotel Faran, NurseryBlock-6,P.E.C.H.S.Shahra-e-Faisal,Karachi.Phone: (021) 34380101-2Fax: (021) 34380106Email:[email protected]:www.famco.com.pk

BankersAllied Bank LimitedAl Barka Bank (Pakistan) LimitedBank Al-Falah LimitedBarclays Bank PLCFaysal Bank LimitedHabib Bank LimitedHabib Metropolitan Bank LimitedHSBC Bank Middle East LimitedJS Bank LimitedMCB Bank LimitedMeezan Bank LimitedNational Bank of PakistanNIB Bank LimitedSoneri Bank LimitedStandard Chartered Bank (Pakistan) Limited


Corporate Calendar

Meetings

Audit Committee meeting to consider accounts of the Company for the year ended June 30, 2013

Board of Directors meeting to consider accounts of the Company for the year ended June 30, 2013

Annual General meeting of Shareholders to consider accounts of the Company for the year ended June 30, 2013

Audit Committee meeting to consider accounts of the Company for the quarter ended September 30, 2013

Board of Directors meeting to consider accounts of the Company for the quarter ended September 30, 2013

Allotmentof15%bonussharestotheOrdinaryShareholders

Redemption of 45,060,684 preference shares of Rs 10 each

Audit Committee meeting to consider accounts of the Company for the half year ended December 31, 2013

Board of Directors meeting to consider accounts of the Company for the half year ended December 31, 2013

Audit Committee meeting to consider accounts of the Company for the nine months ended March 31, 2014

Board of Directors meeting to consider accounts of the Company for the nine months ended March 31, 2014

Conversion of preference shares into ordinary shares

Date

August 16, 2013

August 19, 2013

September 25, 2013

October25,2013

October28,2013

December 17, 2013

December 31, 2013

February 12, 2014

February 14 , 2014

April 25, 2014

April 28, 2014

June 04, 2014


Notice of Annual General Meeting

NOTICEISHEREBYGIVENthatthe31stAnnualGeneralMeetingofCENTURYPAPER&BOARDMILLSLIMITEDwillbeheldonMonday,October13,2014at10.30a.m.atAvariTowersHotel,FatimaJinnahRoad,Karachitotransactthe following business:

1. Toreceive,considerandadopttheauditedfinancialstatementsfortheyearendedJune30,2014withtheDirectors’andAuditors’reportsthereon.

2. Toconsiderfinalapprovalof15%Bonusshares(interim)declaredbytheBoardofDirectorsintheirmeetingheldonOctober28,2013andissuedtotheshareholdersonDecember17,2013.

3. ToappointAuditorsandfixtheirremuneration.

ByOrderoftheBoard

(MANSOORAHMED)Dated : September 02, 2014 Company Secretary

Notes:

1. ThesharetransferbooksoftheCompanywillremainclosedfromOctober04,2014toOctober13,2014(bothdays inclusive).TransfersreceivedbytheSharesRegistraroftheCompany,M/s.FAMCOAssociates(Private)Limited,8-F,NexttoHotelFaran,Nursery,Block-6,P.E.C.H.S.,Shahra-e-Faisal,KarachiuptoOctober03,2014willbeconsideredintimeforthepurposeofattendanceofAnnualGeneralMeeting.

2. Amemberwho has deposited his/her shares intoCentralDepositoryCompanyof Pakistan Limited,mustbring his/her participant’s ID number and CDC account/sub-account number alongwith original Computerized NationalIdentityCard(CNIC)ororiginalPassportatthetimeofattendingthemeeting.

3. AmemberentitledtoattendandvoteattheAnnualGeneralMeetingmayappointanothermemberashis/herproxytoattend,speakandvoteinsteadofhim/her.

4. Formsofproxytobevalidmustbeproperlyfilled-in/executedandreceivedattheCompany’sRegisteredOfficesituatedatLaksonSquare,BuildingNo.2,SarwarShaheedRoad,Karachinotlaterthanforty-eighthoursbeforethetimeofthemeeting.

5. Members are requested to notify the Shares Registrar of theCompanypromptlyof any change in theiraddresses.

6. MemberswhohavenotyetsubmittedphotocopyoftheirComputerizedNationalIdentityCard(CNIC)arerequestedtosendthesametoourSharesRegistrarattheearliest.

7. Formofproxyisenclosedherewith.


MilestonesProduction Capacity

1990 Commencedcommercialproductionwiththreemachineshavingcapacityof30,000MetricTonsperannum.

1996 Started12.3MWCaptivePowerGenerationPlantasCenturyPowerGenerationLimited(aformersubsidiaryCompany).

1997 Enhanced production capacity to 50,000 Metric Tons through addition of a three layers Board Machine (PM-4).AddedanOfflineCoatingMachine(CM-2).

1999 Enhancedproductioncapacityto60,000MetricTonsafterre-engineeringofproductionfacilities.

2002 Installed Dissolved Air Floatation Plant (DAF), the first of its kind in Pakistan for treatment of effluent in Paper andBoardSector.

2003 Enhanced production capacity to 80,000 Metric Tons per annum after installation of twin layer Board Machine(PM-5).

AddedaCorrugatedBoxesManufacturingPlantwithcapacityof22,000MetricTonsperannum.

2005 ConvertedPowerGeneratorstodualfiredconfigurationi.e.oilandnaturalgas.Enhancedun-bleachedandbleachedpulpcapacities.

MergedCenturyPowerGenerationLimited(aformersubsidiaryCompany)withtheCompany.

2006 Enhancedproductioncapacityto110,000MetricTonsperannumafterinstallationofPaperMachine(PM-6).

AddedOnlineCoatingfacilitytothreelayersBoardMachine(PM-4).

2008 Enhanced Captive Power Generation capacity to 30 MW as new 18 MW Co-Generation Plant startedcommercialoperations.

2009 Enhanced production capacity to 240,000 Metric Tons per annum as Coated Board Duplex Plant (PM-7) starteditscommercialoperations.

2010 AddedanewCorrugatorwithcapacityof24,000MetricTonsperannum.

2011 Enhanced Box Making capacity to 30,000 Metric Tons per annum after a New Box Machine is added with capacityof8,000MetricTonsperannum.

2012 InstallednewCoal/BiomassFiredBoilerwithcapacityof30tonperhourofsteam.

2014 Inkedanagreementforinstallationof18MWCoalBasedCo-GenerationPowerPlant.

240

,00

0

60,0

00 11

0,0

00

110,000

30,0

00

110,000

80,0

00

80,000

50,0

00

1990 1997 1999 2003 2006 2009

ProductionCapacity(M.Tons)


Sales Revenue (Gross)

2009Rupees

Eight Billion

2012Rupees

Fourteen Billion

2013Rupees

Sixteen Billion

2014Rupees

Seventeen Billion

2008Rupees

Five Billion

2010Rupees

Eleven Billion

2011Rupees

Thirteen Billion

2000Rupees

Two Billion

2004Rupees

Three Billion

2007Rupees

Four Billion


Safety policy

• ImproveOccupationalHealthandSafety(OHS)performancecontinuouslyinallareasofoperations.

• Implement necessary controls and measures for mitigation of accidents and associated riskbysettingobjectivesandfollowingapplicablelegalandotherrequirements.

• PromoteOHS practices through training of employees for healthy and safeworkenvironment.

• Communicate Safety Policy to all stakeholders and review it periodically for ensuring adequacyandcompliancewithOHSAS18001standards.

At Century, we are committed to:


Certifications and Awards

1998

2002

2006

2008

2011

2007

2012

2004

2003

AwardedISO-9002-QMScertification.

Awarded “Best Corporate Award” on Annual Report for the year 2000 and 2001 in acompetitionjointlyorganizedbyInstituteofCharteredAccountantsofPakistan(ICAP)andInstituteofCostandManagementAccountantsofPakistan(ICMAP).

Recognized by Karachi Stock Exchange (KSE) as one of the Top 25 Companies for the year2004.

Awarded“BestCorporateAward”onAnnualReportfortheyear2007.AwardedBestEnvironmentalReporterinACCA-WWFPakistanEnvironmentalReportingAwards2007intheLocalListedCompanyCategory.

Awarded the certification on “Integrated Management System (IMS)” which consists of:•QualityManagementSystem(QMS)ISO9001:2008;•EnvironmentalManagementSystem(EMS)ISO14001:2004and•OccupationalHealthandSafetyAssesmentseries(OHSAS)18001:2007.

Awarded“BestCorporateAward”onAnnualReportfortheyear2005.


Recognized by Karachi Stock Exchange (KSE) as one of the Top 25 Companies for the years2002and2003.



Signing Ceremony “18 Megawatt Coal Based Co-Generation Power Plant”

held on May 15, 2014

SeeninthepictureareMr.AftabAhmad,ChiefExecutiveOfficerofCenturyPaper&BoardMillsLimitedandMr.HuiGiang,ViceGeneralManagerofRUNHPowerCorporationLimited,People’sRepublicofChina.



18 Megawatt Coal Based Co-Generation Power Plant

ThisplantisfirstofitskindinPakistan.ItcomprisesoftwoHighPressureCoalFiredRe-CirculatingBoilerswithcapacityof65TonperHour(TPH).SteamTurbineof18Megawattwillbeoperatedbythesteamsogenerated;in addition 45 TPH low pressure steam will be extracted for use in paper makingprocess.

TheRUNHPowerCorporationLimited–AwellreputedChineseCompanyis chosen as the EPC contractor for the plant, and an agreement to this effecthasbeensignedwiththecontractor.

It is estimated that the cash outlay for the plant will amount to Rupees 3.20Billion,whichwillbefinancedona30:70basis;withamixof30%frominternalcashgenerationand70%fromthefinancialinstitutions.

Ajointandhybrid(conventional&Islamic)financingfacilitiesofRs.2,250million have been arranged from consortium of banks led by MCB Bank Limited.TheMCBBankLimitedandAlliedBankLimitedwillprovidetheirshare under the Conventional Mode of financing while the Meezan Bank LimitedwilldosounderIslamicModeoffinancing.

The plant is expected to be fully operational in the second quarter of the year 2015-16 andwill cater for the60%energy needof theCompany;hencerelievingtheCompanyofitsdependenceonGas.

DuPont Analysis

Return on assets4.7 times

Net Profit margin 4.3%

Net ProfitRs.’m’ 630

SalesRs.’m’ 14,668

Total CostRs.’m’ 14,038

Gross SalesRs.’m’ 17,132

TaxesRs.’m’ 2,464

Current Assets

Rs.’m’ 4,830

Non-Current Assets

Rs.’m’ 8,349

Current Libilities

Rs.’m’ 3,426

Non-CurrentLiabilities

Rs.’m’ 4,008

ReservesRs.’m’ 3,373

Share capitalRs.’m’ 2,372

Net SalesRs.’m’ 14,668

Total AssetsRs.’m’ 13,179

Total liabilietiesRs.’m’ 7,434

Owner’s equityRs.’m’ 5,745

Assets turnover1.1 times

Owner’s equityRs.’m’ 5,745

Total AssetsRs.’m’ 13,179

Ownership ratio43.6%

Return on equity11%


(Rupees in thousands)

2014 %age 2013 %age

Wealth Generated

Turnover (including sales tax) 17,132,230 16,512,551

Purchased material and services(including sales tax) (13,031,663) (11,664,140)

Value Added 4,100,567 4,848,411

OtherIncome 105,783 90,752

Total 4,206,350 100 4,939,163 100

Wealth DistributedTo EmployeesSalaries, benefits and related costs 763,170 18 731,199 15

To GovernmentIncome Tax, Sales Tax, Import DutyandWorkers’WelfareFund(Note) 1,286,588 30 1,678,697 34

To providers of CapitalFinance cost on borrowed funds 615,478 15 692,907 14

Retained in BusinessDepreciation, amortization and retained profit 1,541,114 37 1,836,360 37

Total 4,206,350 100 4,939,163 100

Statement of Value Addedfor the year ended June 30, 2014

37% Retained in Business

15% To Providers of Capital30% To Government

18% To Employees

Note:Incometaxincludescurrentanddeferredtaxexpenseasperprofitandlossaccountfortheyear.


Summarized Six Year Data

Balance Sheet 2014 2013 2012 2011 2010 2009

Share CapitalOrdinaryshares 1,471 1,060 707 707 707 707Preference shares 901 2,103 3,004 3,004 3,004 -

Reserves 3,373 2,656 2,085 1,589 1,184 1,172Shareholders’ equity 5,745 5,819 5,796 5,300 4,895 1,878Subordinated loan - - 1,000 1,000 1,000 1,650Long-term financing 4,130 4,425 3,810 4,225 5,075 7,691Deferredtaxation–Liability/(Asset) 661 540 134 - (212) (190)Capital employed 10,536 10,784 10,741 10,525 10,970 11,219Property, plant and equipment 8,340 8,857 9,439 9,384 9,879 10,454Othernon-currentassets 8 19 29 38 49 57Netcurrentassets/Workingcapital 1,405 1,634 309 252 (21) 72

Profit & Loss

Sales–gross 17,132 16,513 14,980 13,959 11,323 8,332Sales–net 14,668 14,236 12,923 11,779 9,702 7,152Gross profit / (loss) 2,021 2,547 2,113 2,010 1,447 (74)Operatingprofit/(loss) 1,529 2,100 1,701 1,703 1,212 (294)Profit / (loss) before tax 914 1,407 790 735 71 (1,595)Profit / (loss) after tax 630 929 515 405 42 (1,054)EBITDA 2,441 3,007 2,479 2,452 1,966 400

Cash Flows

Net cash flow from operating activities 1,034 1,678 1,755 735 (473) (211)Net cash flow from investing activities (251) (305) (798) (235) (163) (567)Net cash flow from financing activities (983) (1,289) (415) (850) (292) 1,511 Changes in cash and cash equivalents (200) 84 542 (350) (928) 733 Cashandcashequivalents–Yearend (1,536) (1,336) (1,421) (1,963) (1,613) (685)

Others

Number of Employees (at year end) 1,519 1,643 1,638 1,710 1,631 1,520Number of Shares (million)Ordinaryshares 147 106 71 71 71 71Preference shares 90 210 300 300 300 -

Rupees in million


Total Assets and Net Sales (Rupees in million)

Total Assets

Net Sales

13,777

7,152

14,069

9,702

14,069

11,77913,275

14,23613,179

14,66813,462

12,923

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

201420132012201120102009

Current Assets and Current Liabilities(Rupees in million)

Current Assets

Current Liabilities

3,076 3,004

3,929 3,950

4,6464,394 4,400

2,765

4,830

3,426

3,9953,686

-

1,000

2,000

3,000

4,000

5,000

6,000

201420132012201120102009

Long Term Liabilities and Equity (Rupees in million)

Long Term Liabilities

Equity1,878

8,895

4,8955,225 5,300

4,375

5,819

4,691

5,745

4,008

5,796

3,980

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

201420132012201120102009


Financial Performance

2014 2013 2012 2011 2010 2009

Profitability

Gross profit / (loss) margin % 14 18 16 17 15 (1)EBITDA margin to sales % 17 21 19 21 20 6Profit / (loss) before tax margin % 6 10 6 6 1 (22)Net profit / (loss) margin % 4 7 4 3 0.43 (15)Return on equity % 11 16 9 8 1 (56)Return on capital employed % 13 18 14 14 10 (3)

Operating Performance / Liquidity

Totalassetsturnover(excl.CWIP) 1.13 : 1 1.08:1 0.97:1 0.84:1 0.69:1 0.53:1Fixed assets turnover 1.73 : 1 1.58:1 1.37:1 1.22:1 0.95:1 0.67:1Debtors turnover 15.63 : 1 14.8:1 16.81:1 18.67:1 17.92:1 18.17:1Debtors days 23 25 22 20 20 20Inventory turnover 5.52 : 1 6.34:1 4.99:1 4.31:1 5.13:1 5.06:1Inventory days 66 58 73 85 71 72Creditors turnover 12.64 : 1 11.78:1 11.03:1 10.16:1 9.25:1 9.87:1Creditors days 29 31 33 36 39 37Operatingcycledays 60 73 75 69 52 55Returnonassets(excl.CWIP) % 4.85 7.02 3.88 2.88 0.30 (8.00)Current ratio 1.41 : 1 1.59:1 1.08:1 1.06:1 0.99:1 1.02:1Quick / Acid test ratio 0.31 : 1 0.46:1 0.34:1 0.20:1 0.26:1 0.30:1

Capital Market / Capital Structure Analysis

Market value per share Rs 53.30 27.05 18.95 15.40 16.00 13.19Breakup value / (Net assets/share) Rs 32.94 35.05 39.50 32.48 26.75 26.58Earnings / (loss) per share (pre tax) Rs 7.37 13.65 4.49 3.88 (2.06) (17.96)Earnings / (loss) per share (after tax) Rs 3.46 5.30 1.40 0.17 (2.38) (11.87)Price earning ratio 15.40:1 5.10:1 13.54:1 90.59:1 (6.72):1 (1.11):1Market price to breakup value 1.62:1 0.65:1 0.48:1 0.47:1 0.60:1 0.50:1Debt equity ratio 42 : 58 43 : 57 36 : 64 40 : 60 46 : 54 69 : 31Weightedaveragecostofdebt % 10.35 11.56 13.50 12.76 13.07 13.83Interest coverage ratio 2.49:1 3.03:1 1.87:1 1.76:1 1.06:1 (0.23):1


Breakup Value and Market Value(Rupees)

Breakup Value

Market Value

27

13

27

16

32

15

35

27

33

53

40

19

-

12

24

36

48

60

201420132012201120102009

Debtors' Days and Creditors' Days

Debtors' Days

Creditors' Days

20

37

20

39

20

36

25

31

23

29

22

33

-

5

10

15

20

25

30

35

40

45

201420132012201120102009

Debt Equity Ratio

Debt

Equity

69

31

46

54

40

60

43

57

42

58

36

64

-

10

20

30

40

50

60

70

80

201420132012201120102009


Horizontal Analysis

2014 2013 2012 2011Amount % Amount % Amount % Amount

PROFIT AND LOSS ACCOUNT

Sales–net 14,668 103 14,236 110 12,923 110 11,779 Cost of sales (12,646) 108 (11,689) 108 (10,810) 111 (9,769)Gross profit 2,022 79 2,547 121 2,113 105 2,010 General and administrative expenses (351) 113 (310) 113 (275) 121 (227)Selling and distribution expenses (140) 126 (111) 103 (108) 103 (105)Otheroperatingincome 106 116 91 101 90 102 88 Otheroperatingcharges (107) 91 (117) 98 (119) 192 (62)Operatingprofit 1,529 73 2,100 123 1,701 100 1,704 Finance cost (615) 89 (693) 76 (911) 94 (969)Profit before taxation 914 65 1,407 178 790 107 735 Taxation (284) 59 (478) 174 (275) 83 (330)Profit after taxation 630 68 929 181 515 127 405

BALANCE SHEET

NON-CURRENT ASSETSProperty, plant and equipment

Operatingfixedassets 8,138 92 8,808 95 9,239 99 9,365Capital work in progress 203 417 48 24 200 1051 19

Intangible assets 3 24 11 49 23 74 31Long-term loans and advances 3 63 5 162 3 69 4Long-term deposits 3 100 3 102 3 93 3

CURRENT ASSETSStores and spares 910 105 867 102 854 97 877Stock in trade 2,563 127 2,016 121 1,672 63 2,670Trade debts 1,007 85 1,185 113 1,046 142 736Loans and advances 23 63 36 235 15 28 56Trade deposits and short-term prepayments 3 28 12 355 3 37 9Otherreceivables 2 18 11 8 144 598 24Tax refunds due from Government 141 294 48 244 20 29 69Taxation-net 111 75 148 413 36 48 75Cash and bank balances 69 89 77 38 204 157 130

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVESIssued, subscribed and paid-up capital

Ordinaryshares 1,471 139 1,060 150 707 100 707Preference shares 901 43 2,103 70 3,004 100 3,004

Reserves 3,373 127 2,656 127 2,085 131 1,589

NON-CURRENT LIABILITIESSubordinated loan - - - - 1,000 100 1,000Long-term financing 3,347 81 4,151 146 2,845 84 3,375Deferred taxation 661 122 540 402 134 - -

CURRENT LIABILITIESTrade and other payables 973 95 1,028 108 956 95 1,005Interest and mark-up accrued 66 133 49 35 141 31 446Short-term borrowings 1,605 114 1,414 87 1,625 78 2,093Current portion of long-term financing 782 285 274 28 965 113 850

Note:2011istheBaseYear.

Rupees in million


Vertical Analysis

2014 2013 2012Amount % Amount % Amount %

PROFIT AND LOSS ACCOUNT

Sales–net 14,668 100.00 14,236 100.00 12,923 100.00Cost of sales (12,646) 86.22 (11,689) 82.11 (10,810) 83.65Gross profit 2,022 13.78 2,547 17.89 2,113 16.35General and administrative expenses (351) 2.39 (310) 2.18 (275) 2.13Selling and distribution expenses (140) 0.95 (111) 0.78 (108) 0.84Otheroperatingincome 106 0.72 91 0.64 90 0.70Otheroperatingcharges (107) 0.73 (117) 0.82 (119) 0.92Operatingprofit 1,529 10.43 2,100 14.75 1,701 13.16Finance cost (615) 4.19 (693) 4.87 (911) 7.05Profit before taxation 914 6.24 1,407 9.88 790 6.11Taxation (284) 1.94 (478) 3.36 (275) 2.13Profit after taxation 630 4.30 929 6.52 515 3.98

BALANCE SHEET

NON-CURRENT ASSETSProperty, plant and equipment

Operatingfixedassets 8,138 61.75 8,808 66.35 9,239 68.63Capital work in progress 203 1.54 48 0.37 200 1.49

Intangible assets 3 0.02 11 0.09 23 0.17Long-term loans and advances 3 0.02 5 0.03 3 0.02Long-term deposits 3 0.02 3 0.02 3 0.02

CURRENT ASSETSStores and spares 910 6.91 867 6.53 854 6.34Stock in trade 2,563 19.45 2,016 15.19 1,672 12.42Trade debts 1,007 7.64 1,185 8.92 1,046 7.77Loans and advances 23 0.17 36 0.27 15 0.11Trade deposits and short-term prepayments 3 0.03 12 0.09 3 0.02Otherreceivables 2 0.02 11 0.08 144 1.06Tax refunds due from Government 141 1.07 48 0.36 20 0.15Taxation-net 111 0.84 148 1.12 36 0.27Cash and bank balances 69 0.52 77 0.58 204 1.52TOTALASSETS 13,179 100 13,275 100 13,462 100

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVESIssued, subscribed and paid-up capital

Ordinaryshares 1,471 11.16 1,060 7.99 707 5.25Preference shares 901 6.84 2,103 15.84 3,004 22.32

Reserves 3,373 25.60 2,656 20.15 2,085 15.49

NON-CURRENT LIABILITIESSubordinated loan - - - - 1,000 7.43Long-term financing 3,347 25.40 4,151 31.27 2,845 21.13Deferred taxation 661 5.00 540 4.14 134 1.00

CURRENT LIABILITIESTrade and other payables 973 7.38 1,028 7.53 956 7.09Interest and mark-up accrued 66 0.50 49 0.37 140 1.05Short-term borrowings 1,605 12.18 1,414 10.65 1,625 12.07Current portion of long-term financing 782 5.94 274 2.06 965 7.17

TOTAL EQUITY AND LIABILITIES 13,179 100 13,275 100 13,462 100

Rupees in million


Chairman’s Message

Your Company passed through a difficult time in the year 2013-14. All our original planningwas disturbed due to the total closure of Gas supply from end of December 2013 to March 2014,

Unfortunately, in the summer also gas toindustrieshavebeensuppliedforjusttwodaysin a week which further added to the misery of the industrial undertakings, particularly the continuous process industry. Hence, leftwithno options to meet its market commitments, the management of your Company reverted to expensive alternate fuels which seriously impacted the bottom line for the year under review.

The Board of Directors of the Company have been considering a Coal Fired Co-Generation Power Plant for some time, however the unprecedented gas shut down forced the Boardtomoveonfasttrack. Iampleasedtoinform you that after working on war footing in this respect EPC Contract has been signed withRUNHPOWERofCHINAfor18Megawatt

CoalBasedCo-GenerationPowerPlant.Atthesame time the financial arrangements with the Bankshavealsobeenfinalized.Theprojectwitha capital outlay of Rs. 3.2 Billion is expectedto become operational by the second quarter ofthefinancialyear2015-16.Hencefromtheyear2015-16themajorportionofourenergyrequirement particularly for PM-7 will be met internallythroughcoalgeneration.

It seems that there will unlikely be good news insight for the year 2015, unless the ongoing curtailment of Gas and load shedding on the WAPDA system is stopped. However on ourpart by better pre-planning we shall make all efforts to mitigate the negative impact of energyshortages.

I am confident that the measures taken and investment made by the management of your Company to overcome the energy crises will soon bear fruit and the Company will be able to utilize its full production capacity onwards fromtheyear2015-16.

Iqbal Ali LakhaniChairman


Directors’ Report

MARKETREVIEWMarket demand for various Paper & Paperboard products during the year under review was stable throughout theyear. YourCompany’s productswere taken as firstpreferencebythemajormarketsegments.However,dueto energy constraints your company could not get the maximumbenefitofthemarketpullforitsproducts.

In the second quarter the energy crisis started building upandreacheditspeakinthethirdquarter.Duringthisperiodthedemandofmajorproductcategories(CoatedDuplex Boards and Coated Bleached Board) by the regular customers was met on first priority with the available energysourcesincludingthealternatefuels.

Keeping in view the market acceptability, products quality and better product mix and increasing energy cost your company managed to get an increase of 9% in average selling price during the year under review as compared tolastyear.

Strengthening of rupee and fall in international prices of finished paper & paperboard products started encouraging the imports during fourth quarter of the year under

review.Consequentlythesalesinthefourthquarteralsodeclinedandourpricescameunderpressure.

Market outlook is stable and market demand for your company products is very much there but higher cost of manufacturing and drop in international market prices will bechallengeinthenextyear.

OPERATIONSDuring the year under review the full utilization of capacity was severely restricted due to limited availability ofenergy.Furthertoachievetheproductionusingalternatefuels was not economical as the price did not match tocoverthe incrementalcost.TheCompanyoperatedunderadifficultmixofenergyofGas,Coal,FurnaceOiland Diesel. Nevertheless, it is very commendable thatthe operational staff of your Company endeavoured to availeverydropofavailableenergy.

During the year under review a production level of 175 thousand tons was achieved as compared to last year’s productionof186thousandtons.Thecapacityutilizationfortheyearstoodat73%oftheinstalledcapacity(L.Y.77%).

OnbehalfoftheBoardofDirectors(BOD),Iampleasedtopresentthe Annual Report of the Century Paper & Board Mills Limited for the year ended June 30th, 2014, along with the audited financial statements,andAuditors’reportthereon.


SALES Your Company was not able to maintain a regular supply of the product to its customers in winter season due to energyconstrains.Hencesomeofourcustomersresortedtoalternatesourcestomeettheirowncommitments.

In quantitative terms the sales of the Company for the yearunderreviewwere170thousandmetrictons(L.Y.181thousandmetrictons).TherupeevalueofthenetsalesfortheyearunderreviewstoodatRs.14,668million(L.Y.Rs. 14,236million) showing ameagre increase of threepercent which was due to the increased selling price of theproductmix.

Gross Sales and Gross Pro�t(Rupees in million)

-

5,000

10,000

15,000

20,000

201420132012201120102009

(500)

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

8,332

(74)

1,447

2,0102,113

2,547

2,021

11,323

13,959 14,980

16,513 17,132

Gross Sales Gross Pro�t


FINANCIALS Contrary to last year, the financials of the Company for the year under review were affected adversely bymultiple factors. The low volume of sales and thehigh cost of inputs including the continuous shortage and unpredictable availability of energy have adversely affected our bottom line. Resultantly the Companyincurred a loss in the third quarter and made a nominal profitinthefourthquarterfortheyearunderreview.

Your Directors however feel that the management of the Company possibly could do no better than this under these very unfavourable circumstances. However theyassure the stakeholders that the strategic investment conceived by the Directors to overcome the energy crisis which is discussed in the later part of this report will bear fruit from the next financial year and thereafter the financials will show an improved bottom line as compared tothepresent.

The net turnover for the year under review is recorded atRs.14,668million(L.Y.Rs.14,236million).Grossprofitof the Company for the period under review stood at Rs.2,021millionascomparedtoRs.2,547millionofthelastyear.

The operating profit for the year under review stood at Rs. 1,529million as compared to an operating profitofRs.2,100millionfromthelastyear.Thedecreaseinoperating profit is attributable to the decrease in sales volumecoupledwith increasedcostof inputs.Thenetprofit after tax of the Company for the year under review decreasedtoRs.630millioncomparedtolastyear’snetprofitofRs.929million.

A summary of the operating results of the Company for the year under review along-with the comparatives for the last year are as under:

EARNINGS PER SHAREFor the year under review the number of ordinary shares increased from 106,025 thousand to 147,018 thousand, due to declaration of 15% bonus shares and later conversion of25% i.e.75millionofpreferenceshares intoordinaryshares.AccordingtotherequirementoftheInternationalFinancial Reporting Standards (IAS 33), the Earnings per Share (EPS) has been calculated taking weighted average numberofshares,whichcomesto124,060thousand(L.Y.103,086thousand)asatJune30th2014.Furtherduetoconversion of 25% of preference shares the proportionate dividend attributable to the cumulative preference shares hasbeen reduced from the lastyear figureofRs. 383milliontoRs.201millionforthecurrentyear.

Consequently the earnings attributable to the ordinary shareholders for the purpose of calculating EPS comes toRs.429million(L.Y.Rs546million).OnthisbasistheEPSfortheyearisreportedatRs.3.46comparedtothepreviousyear’srestatedEPSofRs.5.30.

2014 2013

Sales 14,668 14,236

Cost of Sales (12,647) (11,689)

Gross Profit 2,021 2,547

Admin and Selling Expenses (598) (538)

OtherIncome 106 91

Operatingprofit 1,529 2,100

Financial Charges (615) (693)

Net profit before tax 914 1,407

Taxation (284) (478)

Net Profit after Tax 630 929

Sales Volumes (Metric Tons) 170,225 180,725

Pro�t Before And After Tax(Rupees in million)

(2,000)

(1,500)

(1,000)

(500)

-

500

1,000

1,500

201420132012201120102009

(2,000)

(1,500)

(1,000)

(500)

-

500

1,000

1,500

(1,595)

(1,054)

42

405 515

929 630

71

735 790

1,407

914

Before Tax After Tax

Rupees in million


PROFILINGOFCAPITALSTRUCTUREIn order to improve the financial health of the Company your Directors took some major strategic decisionsduringtheyeartore-profile itscapitalstructure.Thesedecisions include:

a) Issue of 15 % Bonus Shares In the first half of the financial year under review,

yours Directors in order to provide a return to the Ordinaryshareholdersannounced15%dividendintheshapeoftheBonusshares.

b) Redemption of Preference Shares In the last financial year your Directors redeemed

30% (16% plus 14%) of preference shares along with the dividend in arrears by issuing right shares and using theinternallygeneratedcash.

The strategy of the Directors to retire this Capital continuedintheyearunderreviewalso.Inthefirsthalf of the year the Directors decided to further redeem 15% of original issue of Preference Shares alongwiththedividendinarrears.

c) ConversionofPreferenceSharesintoOrdinaryShares Further in the last quarter the Directors decided to

convert 25% of the original issue (75 million Preference Shares) into ordinary shares as per approved formula set up in the amended terms, right and privileges of Preference Shares. The conversion price of theOrdinarySharescalculated (asper formula)wasRs.47.19pershare.

Onthebasisoftheaboveprice25,089,437OrdinaryShares were issued to convert 75,101,140 Preference Shares along with the cumulative dividend in arrears uptothedateofconversion.

Due to three successive redemptions and one conversion the Preference Shares Capital have been reducedfromitsoriginalRupeesthreebilliontojustRs.901millionandthefixedchargeaftertaxperyearof the dividend has been reduced from the original Rs. 390million to approximately Rs.100million peryear.

In order to provide a healthy return to the ordinary shareholders the Directors intend to completely redeemthepreferenceshares.Howeverthismaynotbe possible due to the proposed capital outlay on theCo-GenerationPowerPlant.Thereforeitishighlyprobable that the Company will carry the remaining amount of preference shares on its books for some time.

Due to the above stated measures the equity of the Company has been re-classified which is reflected in theBalanceSheet.

CAPITALEXPENDITURE

a) SecondaryWasteWaterTreatmentPlant All over the world the paper industry is faced with

a challenge to meet the stringent environmental standards. In Pakistan also meeting the NationalEnvironmental Quality Standards (NEQ’s) is a big challengefortheCompany.Inordertocomplywiththe NEQ’s your Company is in the process of installing a Secondary Waste Water Treatment Plant. Themachinery imported from China has already arrived atthemills.Thecivildesignhasbeenapprovedanditis expected that the plant will be commissioned and completedduringthecurrentfinancialyear.

The total cost of this plant is expected to be around Rs. 250 million. Your Directors envisage the capitaloutlayforthisprojectasasocialresponsibility.

b) 18 Megawatt Coal Based Co-Generation Power Plant It may be recalled that your Directors reported last

year that they are considering all the micro and macrovariablesbeforegoingforinvestmentinenergy.The unexpected massive load shedding of electricity and total gas supply for four months in winter and reduced supply of 33% thereafter somewhat helped the Directors to make a quick decision for this investment.

Property Plant & Equipment(Rupees in billion)

-

4

8

12

16

201420132012201120102009-

4

8

12

16

13.20

10.45 9.90 9.38 9.24 8.80

8.14

13.36 13.59 14.18 14.62 14.81

Gross Net


The Directors in their meeting held in February 2014, decided to move on a fast track for tackling the energy crisis. Hence the work on two fronts namely thesearch of Engineering, Procurement and Construction (EPC) firm and secondly the arrangement of financing fortheprojectstartedsimultaneously.

It is a matter of great pleasure to report that the Company has entered into an agreement with RUNH Power Corporation Limited of China for theEPC contract of the 18 Megawatt Coal Based Co-GenerationPowerPlant.

This plant will cater for un-interrupted supply of 60% of the energy (electricity & steam) requirement of the Company throughout the year. It is expectedthat the plant will be operational by second quarter of2015-16.

The total capital outlay of the plant is expected to be Rs. 3.2 billion. In order to finance this on 70:30debt equity basis the Directors approved the financing arrangement of Rs. 2,250 million with Banks. Thisfinancing which is a hybrid financing arrangement of Islamic mode of financing with Meezan Bank and conventional mode of financing with the syndicate ofMCBBankandAlliedBank.Theloancarriesatwoyeargraceperiodandafiveyearrepaymentterm.Itisenvisagedthattheprojectwillpayofftheloaninthegivenperiod.

APPROPRIATIONS

a) Appropriations for Redemption of Preference Shares and Cumulative Dividend in Arrears on Redemption and Conversion of preference shares

As stated earlier the Directors of your Company tookamajorstrategicdecisionofredeeming15%of300 million preference shares outstanding along with the cumulative dividend in arrears up to the date of redemption.

Also your Directors in the third quarter of the year under review converted Preference Shares along with the dividend in arrears into Ordinary shares. Theconversion was to the maximum extent of 25% (75 million shares) of the original issue of Preference Shares and was done by the formula as stated in the amended terms and conditions and right and privileges attachedtothepreferenceshares.

The redemption of Preference Shares along with the dividends in arrears thereon and settlement of dividend as part of conversion of Preference Shares necessitated the following appropriations of un-appropriatedprofit.

Description Rupees in thousands

UN-APPROPRIATED PROFIT

Un-appropriatedProfitason1stJuly,2013 806,279Total comprehensive Income for the year 613,193

Un-appropriatedProfitbeforeappropriation 1,419,472

Appropriations:Transfer to Capital Redemption Reserve Fund (450,607)

Dividend on redemption and conversion of preference shares

(670,100)

Total Appropriations (1,120,707)

Un-appropriatedProfitasonJune30,2014 298,765

b) Appropriation of Share Premium Reserve Your Directors in the first half of the year under

review declared a dividend in the shape of bonus sharesof 15%.Thisbonuswaspaidbyappropriatingthe share premium reserve as envisaged in section 83 of The Companies Ordinance, 1984. The Sharepremium account at the close of financial year is as follows:

Description Rupees in thousands

Balance as at July 1, 2013 1,047,935

15,903,770OrdinarySharesofRs.10/=eachIssued as fully paid bonus shares (159,038)

Premiumon25,089,437OrdinarySharesissued on conversion of Preference Shares 933,225

As on June 30, 2014 1,822,122


MARKET CAPITALIZATION The Capital markets of the country were on the upwardtrendduringtheyearunderreview.Themarketcapitalization of your Company also fluctuated with the trends of themarket. During the year themarketvalue of the share of the Company touched the high of Rs.78.45;andthelowofRs.26.50.

The number of ordinary shares issued increased from 106 million shares to 147 million shares because of the two factors. First the issue of bonus shares andsecond the issue of ordinary shares in conversion of preferenceshares.Takingthesefactorsintoaccountthe

marketcapitalizationattheendoftheyearwasRs.7,836million (L.Y. Rs. 2,868 million) with a market value pershareofRs.53.30.Thebreak-upvaluepershareattheendoftheyearwasRs.32.94(L.Y.Rs.35.05).

CONTRIBUTION TO THE NATIONAL EXCHEQUERYour Company’s contribution to the National Exchequer amountedtoRs.2,796millionascomparedtoRs.2,559million of the last year. This includes Rs. 257 million(L.Y.Rs.213million)asIncomeTax,Rs.2,465million(L.Y.Rs.2,277million)asSalesTax,Rs.74million (L.Y.Rs.69million)asCustomsDuty.

Shareholders' Equity(Rupees in million)

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

201420132012201120102009

1,878

4,8955,300

5,796 5,819 5,745

Contribution To National Exchequer(Rupees in million)

0

500

1000

1500

2000

2500

3000

201420132012201120102009

1,316

1,805

2,4132,276

2,5592,796


BOARDMEETINGSFour meetings of the Board of Directors were held during the year ended June 30, 2014. Attendance by eachDirector was as under:

Name of Director Meetings Attended

Mr.IqbalAliLakhani(Chairman) 3

Mr.ZulfiqarAliLakhani 2

Mr.AminMohammedLakhani 2

Mr.TasleemuddinAhmedBatlay 4

Mr.ShahidAhmedKhan 3

Mr.KemalShoaib 4

Mr.MuhammadImranRafiq 3

Mr.AftabAhmad(CEO) 4

AUDITCOMMITTEEThe Board in accordance with the Code of Corporate Governance has set up an audit committee comprising of fourDirectors.An independentDirector is itsChairmanand three Non-Executive Directors are members. Fourmeetings of the Committee were held during the year endedJune30,2014.AttendancebyeachDirectorwasas under:

Name of Director Meetings Attended

Mr.KemalShoaib(Chairman) 4

Mr.ZulfiqarAliLakhani 2

Mr.AminMohammedLakhani 2

Mr.TasleemuddinAhmedBatlay 4

The terms of reference of the Audit Committee are thoseasspecifiedintheCodeofCorporateGovernance.In addition the Audit committee is free to ask for any information and explanation in order to satisfy it regarding thefinancialstatementsandinternalcontrols.

The Committee meets at least once every quarter to review the financial statements and any majorjudgementalareawithreferencetoCompany’sbusiness.The Audit Committee gives its recommendation to the Board for the approval of financial statements which are dulyendorsedbytheCEOandCFO.

HUMANRESOURCE&REMUNERATIONCOMMITTEEThe Board in accordance with the Code of Corporate Governance has also constituted Human Resource and Remuneration Committee, comprising of the following three Directors:

Mr.ZulfiqarAliLakhani Chairman

Mr.TasleemuddinAhmedBatlay Member

Mr.AftabAhmad Member

One meeting of the Committee was held during theyear which was attended by all the Directors. Theterms and reference of the committee includes but not limited to those as mentioned in the Code of Corporate Governance.

CORPORATEANDFINANCIALREPORTINGYour Company is committed to good corporate governance.TheBoardacknowledgesitsresponsibilityinrespectofCorporateandFinancialReportingFramework.

These Financial Statements together with the notes thereto have been drawn up, in conformity with the Companies Ordinance, 1984. International FinancialReporting Standards wherever applicable have been followedintheirpreparation.

Proper books of accounts have been maintained by the Company.

Appropriate accounting policies have been consistently applied in preparation of the financial statements and accounting estimates are based on reasonable and prudentjudgement.

There are no doubts upon the Company’s ability to continueasagoingconcern.

There has been no material departure from the best practices of the Code of Corporate Governance, as detailedinthelistingregulationsofthestockexchanges.

The system of internal control is sound in design and has beeneffectivelyimplementedandmonitored.

The Board of Directors certify that the financial statements, including the cash flow and the changes in equity;fairlypresentthestateofaffairsoftheCompany’sbusinessandofitsoperations.

COMPLIANCE WITH THE CODE OF CORPORATEGOVERNANCEThe Statement of Compliance with the Code of CorporateGovernanceisannexedwiththereport.


PATTERNOFSHAREHOLDINGPattern of Shareholding of the Company as at June 30, 2014, along with the necessary information is annexed to thisreport.

There were 2,175 shareholders on the record of the CompanyasatJune30,2014.

PROVIDENTANDGRATUITYFUNDSThe Company provides terminal benefits to its employees intheshapeofprovidentfundandgratuity.Thesefundedbenefits are maintained by two separate duly approved trusts.These trusts aremanagedby the trusteeswhogetthefundsauditedeachyear.

The Trustees of the respective funds have informed the Company that the values of the investments of the two funds were as follows as on June 30, 2014:

Provident Fund Rs.346.05million

Gratuity Fund Rs.236.23million

AUDITORSTheAuditors BDOEbrahim&Companyare the retiringauditors of the Company and offers their services for re-appointment.Theyconfirmedthattheyhavebeengivensatisfactory rating under the Quality Control Review Program of The Institute of Chartered Accountants of Pakistan (ICAP) and the firm is fully compliant with the International Federation of Accountants (IFAC) guidelines on code of ethics, as adopted by the ICAP. On the

recommendation of the Board’s Audit Committee, the Board of Directors proposed their re-appointment by the shareholders at the ensuing Annual General Meeting, as auditors of the Company for the year ending June 30, 2015.

CORPORATESOCIALRESPONSIBILITYYourCompanyisapartofLaksonGroupofCompanies.The philanthropic activities on behalf of Company are done by charitable arms of the group under the name of Hasanali & Gulbanoo Lakhani Foundation and Lakson MedicalTrust.

Moreover, your Company is committed to social and environmental cause of the society and believes in buildingstrongbondswithallsegmentsofthesociety.To cement these bonds it carries out activities for the welfare and uplift of the communities of the surrounding areas.

Beside;avaluesystemintheCompanyisinplacetoensuresocial and ethical conduct and to inculcate the spirit of ethical behaviour, develop commitment to excellence andadoptacustomerfocussedapproach.TheDirectorsconsider it as a long term investment in the collective development of Century’s human resource in particular, and the society as a whole. Moreover, festivities likeemployee’s family fun fare, educational trips to historical places, summer camps for employee’s children and inter-departmental sport activities have become a regular featurefortheCompany.


SAFETY,HEALTH,ENVIRONMENTANDQUALITY(SHEQ)Your Company is certified for ISO 14001:2004, ISO9001:2008andhasimplementedOHSAS18001:2007.

Your Company is continually working to promote a quality conscious and safe working environment.Comprehensive risk assessment and related preventive measuresarevigorouslypursuedtoachievezeroaccident.SHEQ framework is reviewed by the Company at regular intervals, followed by concrete steps for its improvement which includes the continuous monitoring of energy consumption, gaseous emission from boilers & power plantandwastewaterdisposal.

Training sessions are regularly conducted for employees to enhance the awareness in the area of OHSAS.Additionally a “Communication Participation & Consultation Program” is in progress in order to create increasedSafetyAwareness.

Energyconservationhasdrawnfocus inrecentyears; inthis regard your Company has adopted energy saving systems and cleaner production technologies. Throughregular monitoring and best practices Company has been able to achieve overall improvements in its energy consumption.

HUMANRESOURCEYour Company endeavours to make the best use of its HumanCapitalInventory.Ithasabroadandinteractiveapproachtowardsitsemployees.

Company’s core value system comprising of Humility & Compassion, Integrity, Change, Innovation, Continuous ImprovementMind set, TeamWork, Sense of Urgencyand Customer Centric approach, helps in cultivating individual employees by shaping them in an organized infrastructure, and transforming their creativities into professionalexcellence.

Appropriate career paths and internal recognition programmes are in place for technical and management staff.Scopeemanatesfromon-jobtrainingtoenhancedskillprogramsthroughsubjectspecialistsandculminatesinto participation in local and international seminars and training.

EMPLOYEERELATIONSThe cordial relationship between the management and the employees, remain as good as they are for the last manyyears.

OUTLOOKFORTHEYEAR2014The shortage of energy (gas and electricity) will continue tobeofmajorconcernfortheCompanyfortheensuingfinancialyear.Asstatedintheearlierpartofthisreportyour Directors have taken a major strategic move ofmaking the investment in the Coal Based Co-Generation Power Plant but this plant won’t be ready during the year 2014-15.

Your Board is concerned about the energy situation of the country as this factor will limit the operational capacity ofyourcompany.Hencetheyear2014-15willbeevenmore challenging as compared to the year 2013-14 both intermsofproductionandsales.Itismostlikelythatthebottom line of your Company will remain under stress for the financial year 2014-15, unless there is substantive improvementinthesupplyofelectricpowerandgas.

ACKNOWLEDGEMENTThe Directors are pleased to place on record the appreciation for all the financial institutions, especially those who helped the Company in financing its 18 MegawattCoalBasedCo-GenerationPowerPlant.

They also wish to acknowledge the devotion to duty by the employees of all cadres and are appreciative of their supportanddedication.

They are also thankful to all the other stakeholders and fullyacknowledgetheircontributionandcommitment.

OnBehalfofthe Board of Directors

Aftab Ahmad ChiefExecutiveOfficerKarachi: August 22, 2014


Statement of Compliance with the Code of Corporate Governancefor the year ended June 30, 2014

This statement is being presented to comply with the Code of Corporate Governance contained in the listing regulations of the Karachi and Lahore Stock Exchanges for the purpose of establishing a framework of good governance, whereby alistedcompanyismanagedincompliancewiththebestpracticesofcorporategovernance.

The Company has applied the principles contained in the CCG in the following manner:

1) TheBoardoftheCompanycomprisesofoneindependentandsixnon-executiveDirectors.AtpresenttheBoardconsists of the following:

Independent Director Mr.KemalShoaib

Non-Executive Directors Mr.IqbalAliLakhani Mr.ZulfiqarAliLakhani Mr.AminMohammedLakhani Mr.TasleemuddinAhmedBatlay Mr.ShahidAhmedKhan Mr.MuhammadImranRafiq

Executive Director Mr.AftabAhmad(CEO)

TheChiefExecutiveOfficer(CEO)isadeemedDirectoroftheBoardbyvirtueofhisoffice.

2) The Directors have confirmed that none of them is serving as a Director in more than seven listed companies, includingthisCompany.

3) All the Directors of the Company are registered taxpayers, and none of them has defaulted in payment of any loan to a banking company, DFI and NBFI, or being a member of a stock exchange, has been declared as a defaulter bythatstockexchange.

4) NocasualvacanciesoccurredintheBoardduringthecurrentyear.Anycasualvacancyasandwhenitoccurredispromptlyfilledinwithinthestipulatedtime.

5) TheCompanyhadadoptedaCodeofConductwhichhasbeendisseminatedthroughouttheCompany.IthasalsobeenplacedonthewebsiteoftheCompany.

6) The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the Company. A complete record of particulars of significant policies alongwith the dates onwhich theywereapprovedoramendedhasbeenmaintained.

7) AllthepowersoftheBoardhavebeendulyexercisedanddecisionsonmaterialtransactionsandmajorjudgementalarea,ifany,weretakenbytheBoard.TheBoardapprovestheappointmentanddeterminationofremunerationandtermsandconditionsofemploymentoftheChiefExecutiveOfficer,andotherExecutiveand/orNon-ExecutiveDirector/s.

8) The meetings of the Board were presided by the Chairman and in his absence, by a Director elected by the Board forthispurpose.TheBoardmetatleastonceineveryquarter.WrittennoticesoftheBoardmeeting,alongwithagendawerecirculatedatleastsevendaysbeforethemeetings.Theminutesofthemeetingwereappropriatelyrecordedandcirculatedintime.

9) MajorityoftheDirectorsontheBoardarehavingmorethan14yearsofeducationandmorethan15yearsofexperience; therefore they are exempted from theDirectors training program as prescribed by the Code ofCorporateGovernance.


10)TheBoardhasapprovedappointmentofCFO,CompanySecretaryandHeadof InternalAudit, includingtheirremunerationandtermsandconditionsofemployment.

11) The Directors report has been prepared in compliance with the requirements of the CCG containing the salient mattersrequiredtobedisclosed.

12) Before approval by the Board the financial statements of the Company were duly reviewed by the audit committee andendorsedbytheCEOandCFO.Thehalfyearlyandannualaccountswerealso initialledbytheexternalauditorsbeforepresentationtotheBoard.

13)TheDirectors, CEO and executives do not hold any interest in the shares of theCompany other than thatdisclosedinthepatternofshareholding.

14)TheCompanyhascompliedwithallthecorporateandfinancialreportingrequirementsoftheCCG.

15)TheBoardhasformedanauditcommitteecomprisingofoneindependentandthreenon-executiveDirectors.TheChairmanoftheCommitteeisanindependentDirector.

16) The meetings of the audit committee were held at least once every quarter prior to approval of interim and final resultsoftheCompanyasrequiredbytheCCG.Thetermsofreference/charterofthecommitteehavebeenformedandapprovedbytheBoardandadvisedtothecommitteeforcompliance.

17) The Board has also constituted a Human Resource and Remuneration Committee comprising of two non-executive DirectorsandoneexecutiveDirector.TheChairmanoftheCommitteeisanon-executiveDirector.

18)TheBoardhassetupaneffective internalauditfunctionwhich isheadedbyacharteredaccountant.Thefulltime staffs are qualified and experienced for the purpose, and conversant with the policies and procedures of the Company.

19) The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the Quality Control Review Program of the Institute of Chartered Accountants of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Company, and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics asadoptedbytheInstituteofCharteredAccountantsofPakistan.

20) The statutory auditors or the persons associated with them have not been appointed to provide any other services except in accordancewith the listing regulations.Theauditorshaveconfirmedthat theyhaveobserved IFACguidelinesinthisregard.

21) The Company announces the “closed period” prior to the announcement of interim/final results, and business decisions, which may materially affect the market price of the Company’s securities and immediately intimates theclosedperiodtoDirectors/ExecutivesandStockExchange(s).TheBoardhassetthethresholdofManagerandabovetobean“executive”asrequiredbyCCG.

22) Material and sensitive information has been disseminated at once among all market participants through Stock Exchange(s).

23)ItisconfirmedthatmaterialprinciplescontainedintheCodeofCorporateGovernancehavebeencompliedwith.

Aftab AhmadChiefExecutiveOfficer Karachi:August22,2014


Review Report to the Members on the Statement of Compliance with the Code of Corporate GovernanceWehavereviewedtheenclosedStatementofCompliancewiththebestpracticescontainedintheCodeofCorporateGovernance (the Code) prepared by the Board of Directors of Century Paper and Board Mills Limited for the year endedJune30,2014tocomplywiththerequirementsofListingRegulationsNo.35ofKarachiStockExchangeLimitedandLahoreStockExchangeLimited,wheretheCompanyislisted.

TheresponsibilityforcompliancewiththeCodeisthatoftheBoardofDirectorsoftheCompany.Ourresponsibilityistoreview,totheextentwheresuchcompliancecanbeobjectivelyverified,whethertheStatementofCompliancereflects the status of the Company’s compliance with the provisions of the Code and report if it does not and to highlightanynon-compliancewiththe requirementsoftheCode.A review is limitedprimarilyto inquiriesoftheCompany’spersonnelandreviewofvariousdocumentspreparedbytheCompanytocomplywiththeCode.

As part of our audit of the financial statements we are required to obtain an understanding of the accounting and internalcontrolsystemssufficienttoplantheauditanddevelopaneffectiveauditapproach.Wearenotrequiredtoconsider whether the Board of Directors’ statement on internal control covers all risks and controls or to form an opinionontheeffectivenessofsuchinternalcontrols,theCompany’scorporategovernanceproceduresandrisks.

The Code requires the Company to place before the Audit Committee, and upon recommendation of the Audit Committee, place before the Board of Directors for their review and approval its related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm’s length transactions andtransactionswhicharenotexecutedatarm’slengthpriceandrecordingproperjustificationforusingsuchalternatepricingmechanism.Weareonly required andhaveensuredcomplianceof this requirement to theextentof theapprovaloftherelatedpartytransactionsbytheBoardofDirectorsuponrecommendationoftheAuditCommittee.Wehavenotcarriedoutanyprocedurestodeterminewhethertherelatedpartytransactionswereundertakenatarm’slengthpriceornot.

Based on our review, nothing has come to our attention, which causes us to believe that the Statement of Compliance does not appropriately reflect the Company’s compliance, in all material respects, with the best practices contained intheCodeasapplicabletotheCompanyfortheyearendedJune30,2014.

BDO Ebrahim & Co.KARACHI CHARTERED ACCOUNTANTSDATED: August 22, 2014 Engagement Partner: Qasim E Causer

Tel: +92 21 3568 3030Fax: +92 21 3568 4239www.bdo.com.pk

2nd Floor, Block-C,Lakson SquareBuildingNo.1Sarwar Shaheed RoadKarachi-74200Pakistan


Financial Statements

Contents

43

44

45

46

47

48

49

Auditors’ Reportto the Members

Balance Sheet

Profit and Loss Account

Statement ofComprehensive Income

Cash Flow Statement

Statement ofChanges in Equity

Notes to the Financial Statements

Auditors’ Report to the MembersWehaveauditedtheannexedbalancesheetofCENTURYPAPER&BOARDMILLSLIMITEDasatJune30,2014andthe related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for thepurposesofouraudit.

It is the responsibility of the Company’s management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirementsoftheCompaniesOrdinance,1984.Our responsibility istoexpressanopiniononthesestatementsbasedonouraudit.

WeconductedourauditinaccordancewiththeauditingstandardsasapplicableinPakistan.Thesestandardsrequirethat we plan and perform the audit to obtain reasonable assurance about whether the above said statements are freeofanymaterialmisstatement.Anaudit includesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresintheabovesaidstatements.Anauditalsoincludesassessingtheaccountingpoliciesandsignificantestimatesmadebymanagement,aswellas,evaluatingtheoverallpresentationofabovesaidstatements.Webelievethat our audit provides a reasonable basis for our opinion and, after due verification, we report that:

a) inouropinionproperbooksofaccountshavebeenkeptbytheCompanyasrequiredbytheCompaniesOrdinance,1984;

b) in our opinion:i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in

conformitywiththeCompaniesOrdinance,1984,andareinagreementwiththebooksofaccountsandarefurther in accordance with accounting policies consistently applied except for the changes as stated in note 4.25withwhichweconcur;

ii) theexpenditureincurredduringtheyearwasforthepurposeoftheCompany’sbusiness;andiii) the business conducted, investments made and the expenditure incurred during the year were in accordance

withtheobjectsoftheCompany;

c) in our opinion and to the best of our information and according to the explanations given to us, the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable inPakistan,andgivetheinformationrequiredbytheCompaniesOrdinance,1984,inthemannersorequiredandrespectively give a true and fair view of the state of the Company’s affairs as at June 30, 2014 and of the profit, itscomprehensiveincome,cashflowsandchangesinequityfortheyearthenended;and

d) inouropinionZakatdeductibleatsourceundertheZakatandUshrOrdinance,1980(XVIIIof1980),wasdeductedbytheCompanyanddepositedintheCentralZakatfundestablishedunderSection7ofthatOrdinance.

BDO Ebrahim & Co.KARACHI CHARTERED ACCOUNTANTSDATED: August 22, 2014 Engagement Partner: Qasim E Causer

Tel: +92 21 3568 3030Fax: +92 21 3568 4239www.bdo.com.pk

2nd Floor, Block-C,Lakson SquareBuildingNo.1Sarwar Shaheed RoadKarachi-74200Pakistan


Balance Sheetas at June 30, 2014

2014 2013 2012(Restated) (Restated)

Note (Rupees in thousands)ASSETSNON-CURRENT ASSETS

Property, plant and equipmentOperating fixed assets 5 8,137,746 8,808,166 9,239,066 Capital work in progress 6 202,525 48,532 199,778

8,340,271 8,856,698 9,438,844 Intangible assets 7 2,712 11,403 23,038 Long-term loans and advances 8 2,845 4,501 2,774 Long-term deposits 2,829 2,829 2,775

8,348,657 8,875,431 9,467,431 CURRENT ASSETS

Stores and spares 9 910,456 866,735 853,755 Stock-in-trade 10 2,563,413 2,015,766 1,672,327 Trade debts 11 1,006,753 1,184,771 1,046,176 Loans and advances 12 22,745 36,229 15,412 Trade deposits and short-term prepayments 13 3,312 11,841 3,339 Other receivables 14 1,988 11,059 143,593 Tax refunds due from Government 141,291 48,016 19,689 Taxation - net 15 111,347 148,082 35,827 Cash and bank balances 16 68,975 77,161 204,424

4,830,280 4,399,660 3,994,542 TOTAL ASSETS 13,178,937 13,275,091 13,461,973

EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVES

Authorized share capital410,000,000 (2013: 410,000,000) shares of Rs. 10 each 4,100,000 4,100,000 4,100,000

Issued, subscribed and paid-up capitalOrdinary shares 17 1,470,184 1,060,252 706,834 Preference shares 18 901,214 2,102,832 3,004,046

2,371,398 3,163,084 3,710,880 Reserves 19 3,373,292 2,656,012 2,085,271

5,744,690 5,819,096 5,796,151 NON-CURRENT LIABILITIES

Subordinated loan - - 1,000,000 Long-term financing 20 3,347,424 4,150,682 2,845,455 Deferred taxation 21 661,069 539,848 134,455

4,008,493 4,690,530 3,979,910 CURRENT LIABILITIES

Trade and other payables 22 972,831 1,028,678 955,815 Interest and mark-up accrued 23 65,478 49,141 140,429 Short-term borrowings 24 1,605,021 1,413,555 1,625,123 Current portion of long-term financing 20 782,424 274,091 964,545

3,425,754 2,765,465 3,685,912 CONTINGENCIES AND COMMITMENTS 25

TOTAL EQUITY AND LIABILITIES 13,178,937 13,275,091 13,461,973

The annexed notes from 1 to 47 form an integral part of these financial statements.

Aftab AhmadChief Executive Officer

Tasleemuddin Ahmed BatlayDirector


Profit and Loss Accountfor the year ended June 30, 2014

2014 2013 (Restated)

Note (Rupees in thousands)

Sales - net 26 14,667,669 14,235,621

Cost of sales 27 (12,646,230) (11,689,002)

Gross profit 2,021,439 2,546,619

General and administrative expenses 28 (351,216) (309,542)

Selling and distribution expenses 29 (139,656) (110,810)

Other operating charges 30 (106,873) (117,079)

Other income 31 105,783 90,752

Operating profit 1,529,477 2,099,940

Finance cost 32 (615,478) (692,907)

Profit before taxation 913,999 1,407,033

Taxation 33 (284,150) (478,417)

Profit for the year 629,849 928,616

Basic earnings per share (Rupees) 34 3.46 5.30

Diluted earnings per share (Rupees) 34 3.44 5.30

Appropriations have been reflected in the statement of changes in equity.





Statement of Comprehensive Income for the year ended June 30, 2014



Profit for the year 629,849 928,616

Other comprehensive incomeItems that will not be reclassified in Profit and Loss account Remeasurement of defined benefit liability - net 35 (16,656) (1,634)

Total comprehensive income for the year 613,193 926,982





Cash Flow Statementfor the year ended June 30, 2014



CASH FLOWS FROM OPERATING ACTIVITIESCash generated from operations 37 1,982,674 2,744,051 Finance cost paid (599,141) (784,195)Taxes paid - net (256,073) (212,764)Gratuity paid (20,038) (24,645)Workers’ profit participation fund paid (75,507) (42,403)Long-term loans and advances - net 1,656 (1,727)Long-term deposits - net - (54)

Net cash generated from operating activities 1,033,571 1,678,263

CASH FLOWS FROM INVESTING ACTIVITIESFixed capital expenditure (257,206) (310,676)Profit received on bank deposit accounts 992 188 Proceeds from sale of operating fixed assets 5,515 5,794

Net cash used in investing activities (250,699) (304,694)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of right shares - 416,701 Redemption of preference shares (450,607) (901,214)Proceeds from long-term financing from banking companies - 3,127,500 Repayment of long-term financing from banking companies (294,925) (3,512,727)Proceeds from long-term financing from associated undertaking - 1,000,000 Repayment of long-term financing from sponsors - (1,000,000)Dividend paid on preference shares (236,992) (419,524)

Net cash used in financing activities (982,524) (1,289,264)Net (decrease) / increase in cash and cash equivalents (199,652) 84,305 Cash and cash equivalents at the beginning of the year (1,336,394) (1,420,699)Cash and cash equivalents at the end of the year (1,536,046) (1,336,394)

CASH AND CASH EQUIVALENTSCash and bank balances 16 68,975 77,161 Short-term borrowings 24 (1,605,021) (1,413,555)

(1,536,046) (1,336,394)





Issued, subscribed and paid-up

Reserves

TotalCapital reserves Revenue reserves

Sub total Ordinary share capital

Preference share capital

Share premium Merger reserveRedemption

reserveTotal

General reserve

Unappropriated profit

Total


Balance as at July 01, 2012 as reported 706,834 3,004,046 984,652 7,925 - 992,577 1,232,750 (121,899) 1,110,851 2,103,428 5,814,308

Effect of change in accounting policy (note 4.25.1) - - - - - - - (18,157) (18,157) (18,157) (18,157)

Balance as at July 01, 2012 (Restated) 706,834 3,004,046 984,652 7,925 - 992,577 1,232,750 (140,056) 1,092,694 2,085,271 5,796,151

Transactions with owners

14,136,685 ordinary shares of Rs. 10/- each issued

as fully paid bonus shares 141,367 - (141,367) - - (141,367) - - - (141,367) -

Issue of 21,205,127 ordinary shares of Rs. 10/-

each fully paid in cash 212,051 - 212,051 - - 212,051 - - - 212,051 424,102

Share issue expenses - - (7,401) - - (7,401) - - - (7,401) (7,401)

Redemption of preference shares - (901,214) - - - - - - - - (901,214)

Dividend paid on preference shares - - - - - - - (419,524) (419,524) (419,524) (419,524)

353,418 (901,214) 63,283 - - 63,283 - (419,524) (419,524) (356,241) (904,037)

Transfer to unappropriated profit - - - - - - (919,524) 919,524 - - -

Transfer to redemption reserve - - - - 480,647 480,647 - (480,647) (480,647) - -

Total comprehensive income for the year

Profit for the year as restated - - - - - - - 928,616 928,616 928,616 928,616

Remeasurement of defined benefit liability - net - - - - - - - (1,634) (1,634) (1,634) (1,634)

- - - - - - - 926,982 926,982 926,982 926,982

Balance as at June 30, 2013 (Restated) 1,060,252 2,102,832 1,047,935 7,925 480,647 1,536,507 313,226 806,279 1,119,505 2,656,012 5,819,096

Transactions with owners

15,903,770 ordinary shares of Rs. 10/- each

issued as fully paid bonus shares 159,038 - (159,038) - - (159,038) - - - (159,038) -

Redemption of preference shares - (450,607) - - - - - - - - (450,607)

Dividend paid on preference shares - - - - - - - (236,992) (236,992) (236,992) (236,992)

Conversion of preference shares

Issuance of 25,089,437 ordinary shares of Rs. 10/- each

due to conversion of 25% of initial issue of preference shares 250,894 (751,011) 933,225 - - 933,225 - (433,108) (433,108) 500,117 -

409,932 (1,201,618) 774,187 - - 774,187 - (670,100) (670,100) 104,087 (687,599)

Transfer to redemption reserve - - - - 450,607 450,607 - (450,607) (450,607) - -

Total comprehensive income for the year

Profit for the year - - - - - - - 629,849 629,849 629,849 629,849

Remeasurement of defined benefit liability - net - - - - - - - (16,656) (16,656) (16,656) (16,656)

- - - - - - - 613,193 613,193 613,193 613,193

Balance as at June 30, 2014 1,470,184 901,214 1,822,122 7,925 931,254 2,761,301 313,226 298,765 611,991 3,373,292 5,744,690


Statement of Changes in Equity for the year ended June 30, 2014




1 STATUS AND NATURE OF BUSINESS

Century Paper & Board Mills Limited (“the Company”) was incorporated in Pakistan as a public limited company on August 2, 1984 under the Companies Ordinance, 1984 and its shares are quoted on Karachi and Lahore Stock Exchanges. The registered office of the Company is situated at Lakson Square Building No. 2, Sarwar Shaheed Road, Karachi, Pakistan. The Company is engaged in manufacturing and marketing of paper, board and related products.

2 BASIS OF PREPARATION

2.1 Statement of compliance

These financial statements have been prepared in accordance with the requirements of the Companies Ordinance, 1984 (the Ordinance), directives issued by the Securities and Exchange Commission of Pakistan (SECP) and approved financial reporting standards as applicable in Pakistan. Approved financial reporting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the provisions of the Ordinance. Wherever, the requirements of the Ordinance or directives issued by the SECP differ with the requirements of these standards, the requirements of the Ordinance and of the said directives have been followed.

2.2 Basis of measurement

These financial statements have been prepared under the historical cost convention, except for recognition of certain staff retirement benefits at present value.

These financial statements have been prepared following accrual basis of accounting except for cash flow information.

The preparation of these financial statements in conformity with approved accounting standards requires the management to exercise its judgment in the process of applying the Company’s accounting policies and use of certain critical accounting estimates. The areas involving a higher degree of judgment, critical accounting estimates and significant assumptions are disclosed in note 4.24.

2.3 Functional and presentation currency

These financial statements are presented in Pak Rupees, which is the Company’s functional and presentation currency.

3 NEW STANDARDS, INTERPRETATIONS AND AMENDMENTS TO PUBLISHED APPROVED ACCOUNTING STANDARDS

3.1 The impact of amendments to IAS 16 “Property, Plant and Equipment” and IAS 19 “Employee benefits” which became effective during the year have been explained under the note 4.25 respectively. The other accounting standards, amendments and interpretations of approved accounting standards becoming effective during the year do not have a significant impact on the Company’s financial statements.

Notes to the Financial Statementsfor the year ended June 30, 2014


3.2 Standards, amendments and interpretations to existing accounting standards that are not yet effective and have not been early adopted by the Company are:

Effective date (annual periods beginning on or

after)

IAS 16 Property, Plant and Equipment July 01, 2014IAS 16 Property, Plant and Equipment January 01, 2016IAS 19 Employee Benefits July 01, 2014IAS 27 Separate Financial Statements January 01, 2014IAS 32 Financial Instruments: Presentation January 01, 2014IAS 36 Impairment Assets January 01, 2014IAS 38 Intangible Assets July 01, 2014IAS 38 Intangible Assets January 01, 2016IAS 39 Financial Instruments: Recognition and Measurement January 01, 2014IAS 40 Investment Property July 01, 2014IFRS 2 Share Based Payment July 01, 2014IFRS 3 Business Combination July 01, 2014IFRS 7 Financial Instruments Disclosures January 01, 2015IFRS 8 Operating Segments July 01, 2014IFRS 9 Financial Instruments January 01, 2015IFRS 10 Consolidated Financial Statements January 01, 2014IFRS 12 Disclosure of Interest in Other Entities January 01, 2014IFRS 13 Fair Value Measurement July 01, 2014IFRS 14 Regulatory Deferred Accounts January 01, 2016

3.3 Further the following new standards and interpretations have been issued by the International Accounting Standards Board (IASB), which are yet to be notified by the Securities and Exchange Commission of Pakistan, for the purpose of their applicability in Pakistan:

Effective date (annual periods beginning on or

after)

IFRS 1 First time Adoption of International Financial Reporting Standards July 01, 2009IFRS 9 Financial Instruments January 01, 2015IFRS 10 Consolidated Financial Statements January 01, 2013IFRS 11 Joint Arrangements January 01, 2013IFRS 12 Disclosure of Interest in Other Entities January 01, 2013IFRS 13 Fair Value Measurement January 01, 2013

4 SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the presentation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.



4.1 Property, plant and equipment

a) Operating fixed assets

These are stated at historical cost less accumulated depreciation and impairment losses, if any, except for freehold land which is stated at cost. Historical cost includes expenditure that is directly attributable to the acquisition of the item including borrowing costs (refer note 4.10). The cost of self constructed assets includes the cost of materials, direct labor and any other costs directly attributable to bringing the asset to a working condition for its intended use. Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment.

Subsequent costs are included in an asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The cost of the day to day servicing of property, plant and equipment are recognized in profit and loss account during the financial year in which they are incurred.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Depreciation on operating fixed assets is provided on a straight line basis. Full month’s depreciation is charged on addition, while no depreciation is charged in the month of disposal or deletion of assets. Rates of depreciation, which are disclosed in note 5, are determined to allocate the cost of an asset less estimated residual value, if not insignificant, over its useful life.

The assets’ residual values and useful lives are reviewed and if significant, adjusted at each balance sheet date.

Disposal of assets is recognized when significant risks and rewards incidental to the ownership have been transferred to buyers. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognized in the profit and loss account.

b) Capital work-in-progress

Capital work-in-progress are stated at cost and consist of expenditure incurred, advances made and other costs directly attributable to operating fixed assets in the course of their construction and installation. Cost also includes applicable borrowing costs. Transfers are made to relevant operating fixed assets category as and when assets are available for use as intended by the management.

4.2 Intangible assets

These are stated at cost less accumulated amortization and impairment losses, if any. Major computer software licenses are capitalized on the basis of cost incurred to acquire and bring to use the specific software.

Expenditure which enhances the performance of computer software beyond its original specification and useful life is recognized as a capital improvement and added to the original cost of the software.

Amortization is provided on a straight line basis at the rates disclosed in note 7 to the financial statements. Amortization on addition to intangible assets is charged from the month of addition while no amortization is charged for the month of disposal or deletion of assets.

Costs associated with maintaining computer software’s are recognized as an expense as and when incurred.



4.3 Impairment

The carrying amount of the Company’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If such indications exist, the assets’ recoverable amounts are estimated in order to determine the extent of impairment loss, if any.

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that is largely independent from other assets and group. Impairment losses are recognized as expense in profit and loss account. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Where an impairment loss is recognized, the depreciation charge is adjusted in the future periods to allocate the asset’s revised carrying amount over its estimated useful life.

Impaired assets are reviewed for possible reversal of the impairment at each balance sheet date. Reversal of the impairment losses are restricted to the extent that asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment losses had been recognized. A reversal of impairment loss is recognized in the profit and loss account.

4.4 Stores and spares

Stores and spares are stated at cost less provision for slow moving and obsolete items. Cost is determined by using the moving average method. Items in transit are valued at cost comprising invoice value plus other charges incurred thereon.

4.5 Stock-in-trade

Stock-in-trade are valued at the lower of cost and net realizable value. Cost of raw material is determined by using the monthly weighted average method.

Stock-in-transit is valued at cost comprising invoice value plus other charges incurred thereon.

Work-in-process and finished goods consist of the direct materials costs, fuel and power cost and an appropriate proportion of manufacturing overheads including labor cost, depreciation and maintenance etc.

Net realizable value signifies the estimated selling price in the ordinary course of business less costs necessary to be incurred in order to make the sale.

4.6 Trade debts and other receivables

Trade debts and other receivables are recognized and carried at original invoiced amount less an estimate made for doubtful debts based on a review of all outstanding amounts at the year end. The provision is recognized in the profit and loss account. When a trade debt is uncollectible, it is written off against the provision. Subsequent recoveries of amounts previously written off are credited to the profit and loss account.

4.7 Taxation

Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit and loss account, except to the extent that it relates to items recognized in other comprehensive income or directly in equity, in which case it is also recognized in other comprehensive income or directly in equity respectively.



a) Current

Current tax is the expected tax payable on the taxable income for the year determined in accordance with the prevailing law for taxation of income. The charge for current tax is calculated using tax rates enacted or substantively enacted at the reporting date after taking into account tax credits and tax rebates. It also includes prior year tax adjustments, if any.

b) Deferred

Deferred tax is accounted for using the balance sheet liability method on all temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available in future years to utilize deductible temporary differences, unused tax losses and tax credits.

Deferred tax is calculated based on tax rates that have been enacted or substantively enacted up to the balance sheet date and are expected to apply to the periods when the differences reverse. Deferred tax for the year is charged or credited to the profit and loss account.

c) The Company takes into account decisions taken by the taxation authorities. For instance where the Company’s view differs from the income tax department at the assessment stage, the disputed amounts are shown as contingent liabilities.

4.8 Cash and bank balances

Cash in hand and at banks are carried at nominal amount.

4.9 Borrowings

Loans and borrowings are recorded at the proceeds received. Finance cost are accounted for on accrual basis and are shown as interest and mark-up accrued to the extent of the amount remaining unpaid.

Short-term borrowings are classified as current liabilities unless the Company has unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.

Borrowing cost on long-term finances and short-term borrowings which are specifically obtained for the acquisition of qualifying assets are capitalized as part of cost of that asset. All other borrowing costs are charged to profit and loss account in the period in which these are incurred. Borrowing cost also includes exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost as allowed under IAS 23 “Borrowing cost”.

4.10 Trade and other payables

Trade and other payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year. If not, they are presented as non-current liabilities.



Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Company.

4.11 Provisions and contingencies

A provision is recognized in the balance sheet when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and amount of that obligation can be measured reliably. Provisions are reviewed at each balance sheet date and adjusted to reflect current best estimate.

When the outflow of resources embodying economic benefit is not probable, a contingent liability is disclosed, unless the possibility of cash flow is remote.

4.12 Financial instruments

4.12.1 Financial assets

The Company classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, held to maturity and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. All the financial assets of the Company as at balance sheet date are carried as loans and receivables.

- Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These are included in current assets, except for maturities greater than 12 months after the balance sheet, which are classified as non-current assets. The Company’s loans and receivables comprise ‘trade debts’, ‘loans and deposits’, ‘other receivables’ and ‘cash and cash equivalents’ in the balance sheet.

- Impairment

At the end of each reporting period the Company assesses whether there is an objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss will be reversed either directly or by adjusting provision account.

4.12.2 Financial liabilities

All financial liabilities are recognized at the time when the Company becomes a party to the contractual provisions of the instrument.



4.12.3 Recognition and measurement

All financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given and received respectively. These financial assets and liabilities are subsequently measured at fair value, amortized cost or cost, as the case may be. The particular measurement methods adopted are disclosed in the individual policy statements associated with each item.

4.12.4 Derecognition

The financial assets are de-recognized when the Company losses control of the contractual right that comprise the financial assets. The financial liabilities are de-recognized when they are extinguished i.e. when the obligation specified in the contract is discharged, cancelled or expired.

4.13 Offsetting of financial assets and financial liabilities

Financial asset and financial liability are offset and the net amount is reported in the financial statements only when the Company has a legally enforceable right to set-off the recognized amounts and the Company intends to settle either on a net basis or realize the asset and settle the liability simultaneously.

4.14 Derivative financial instruments

The Company enters into derivative financial instruments. The derivatives that do not qualify for hedge accounting are recognized in the balance sheet at fair value with corresponding effect in profit and loss account.

4.15 Foreign currency translation

Transactions in foreign currencies are converted into functional currency (PKR) at the rates of exchange prevailing on the dates of transactions. Monetary assets and liabilities in foreign currencies are translated into functional currency at the rates of exchange prevailing at the balance sheet date. Exchange gains and losses are recognized in the profit and loss account except where such gains and losses are directly attributable to the acquisition, construction or production of a qualifying asset, in which case, such gains and losses are capitalized as part of the cost of that asset.

4.16 Employees benefits

The Company’s employees benefits comprise of provident fund, gratuity scheme and compensated absences for eligible employees.

4.16.1 Staff retirement benefits

a) Defined benefit plan (Gratuity Fund)

The Company has a gratuity scheme for all its permanent employees who attain the minimum qualification period for entitlement to gratuity. The Gratuity Fund is maintained by a trust created and duly approved. Contributions to the fund are made based on actuarial recommendations. The most recent actuarial valuation was carried out at June 30, 2014 using the projected unit credit method (refer note 35). The Company recognizes expense in accordance with IAS 19 “Employee Benefits”.



b) Defined contribution plan (Provident Fund)

The Company contributes to an approved defined contributory provident fund scheme for all its permanent employees. Equal monthly contributions, both by the Company and the employees are made to the fund, at the rate of 10% of the basic salary plus cost of living allowance. Obligation for contributions to defined contribution plan by the Company is recognized as an expense in the profit and loss account.

4.16.2 Compensated absences

The Company accounts for compensated absences on the basis of earned unavailed leave balance of each employee at the balance sheet date.

4.17 Revenue recognition

Revenue comprises of the fair value of the consideration received or receivable from the sale of goods and services in the ordinary course of the Company’s activities. Revenue from sale of goods is shown net of sales tax and sales discounts, if any.

Revenue is recognized when it is probable that the economic benefits associated with the transactions will flow to the Company and the amount of revenue can be measured reliably. The revenue arising from different activities of the Company is recognized on the following basis:

- Sale of goods are recorded when the risks and rewards are transferred, that is, on dispatch of goods to customers.

- Scrap sales are recognized on delivery to customers at realized amounts.- Return on deposit is accrued on time proportion basis by reference to the principle outstanding and the

applicable rate of return.- Commission on insurance premium is recognized on accrual basis.

4.18 Cash and cash equivalents

Cash and cash equivalents comprise of cash, cheques in hand and balances with banks. Short-term borrowing facilities which are payable on demand and form an integral part of the Company’s cash management are included as part of cash and cash equivalents for the purpose of statement of cash flows.

4.19 Share capital

Share capital is classified as equity and recognized at the face value. Incidental costs, net of tax, directly attributable to the issue of new shares are shown as a deduction in equity.

4.20 Earnings per share

The Company presents earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by weighted average number of ordinary shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

4.21 Dividend and appropriation to reserves

Dividend is recognized as a liability in the period in which it is declared. Appropriations to reserves are recognized in the year in which these are approved.



4.22 Related party transactions

Transactions with related parties are based at arm’s length at normal commercial rates on the same terms and conditions as applicable to third party transactions.

4.23 Segment reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses including revenues and expenses that relate to transactions with any of the Company’s other components. The Company has only one reportable segment.

4.24 Significant accounting judgments and critical accounting estimates / assumptions

The preparation of financial statements in conformity with approved accounting standards requires the management to:-

- exercise its judgment in process of applying the Company’s accounting policies, and- use of certain critical accounting estimates and assumptions concerning the future.

The management has exercised judgment in applying the Company’s accounting policies for classification of Post Employment Benefits as Defined Benefits Plan and Defined Contribution Plan (refer note 4.25 and note 36) that have the most significant effects on the amount recognized in the financial statements.

The areas involving critical accounting estimates and significant assumptions concerning the future are discussed below:-

a) Income taxes

The Company takes into account relevant provisions of the prevailing income tax laws while providing for current and deferred taxes as explained in note 4.8 of these financial statements.

b) Defined benefits plan

Certain actuarial assumptions have been adopted as disclosed in note 36 of these financial statements for valuation of present value of defined benefit obligation and fair value of plan assets. Any changes in these assumptions in future years might affect actuarial gains / losses recognized in those years with corresponding effect on carrying amount of defined benefit plan liability / asset.

c) Property, plant and equipment

Management has made estimates of residual values, useful lives and recoverable amounts of certain items of property, plant and equipment. Any change in these estimates in future years might affect the carrying amounts of the respective items of property, plant and equipment with corresponding effect on the depreciation charge and impairment loss.

d) Stores and spares

Management has made estimates for realizable amount of slow moving and obsolete stores and spares items to determine provision for slow moving and obsolete items. Any future change in the estimated realizable amounts might affect carrying amount of stores and spares with corresponding affect on amounts recognized in profit and loss account as provision / reversal.



4.25 Changes in accounting policies

4.25.1 In accordance with IAS 19 (revised) - “Employee Benefits” (effective for annual period beginning on or after January 1, 2013), the Company has changed its accounting policy for recognition of the actuarial / remeasurement gains and losses on employees’ retirement benefit plans. The remeasurement gains / losses as per actuarial valuation done at financial year end will now be recognized immediately in other comprehensive income. Previously, these gains / losses in excess of the corridor limit were recognized in profit and loss account over the remaining service life of the employees.

The change in accounting policy has been accounted for retrospectively and the comparative figures have thereby been restated. The effect on comparative figures of all prior period presented is as follows:

4.25.2 The Company has changed its accounting policy for stand-by spares in line with amendments to IAS 16 “Property, Plant and Equipment” effective for the period beginning on or after January 01, 2013, which clarifies that spare parts, stand-by equipment and servicing equipment should be capitalized as an asset when they meet the definition of the Property, Plant and Equipment.

As permitted by IAS 8 “Accounting Policy, Change in Accounting Estimates and Errors”, the change in accounting policy has been accounted for prospectively as it is impracticable to determine the period specific and cumulative effect of change on comparative amounts of prior periods presented in these financial statements.

Resultantly, stand-by spares amounting to Rs. 91.42 million have been classified under the head “Plant and Machinery” which were previously shown under stores and spares. This also complies with the requirements of SRO 183(I)/2013 issued by Securities and Exchange Commission of Pakistan in respect of disclosure requirements.


Cumulative effect up to

June 30, 2013

Effect for the year ended

June 30, 2013

Cumulative effect up to

July 01, 2012

(Rupees in thousands)Balance SheetDecrease in unappropriated profit

Actuarial losses on retirement benefit plans (net of tax) 19,341 1,184 18,157 Increase in trade and other payable

Gratuity payable 29,305 1,372 27,933 Decrease in deferred taxation 9,964 188 9,776

Profit and Loss AccountIncrease in profit after taxation

De-recognition of actuarial losses on retirement benefit plans (net of tax) 450 450 -

Statement of comprehensive incomeDecrease due to recognition of actuarial losses on retirement benefit plans (net of tax)

1,634 1,634 -


5 OPERATING FIXED ASSETS

The following is the statement of operating fixed assets:

Description Freehold land

Buildings on freehold

land

Leasehold improvements

Plant and machinery (note 5.2)

Furniture and fixtures

Vehicles Electrical and other

equipmentsComputers Total


Year ended June 30, 2014

Net carrying value basis

Opening net book value (NBV) 278,390 1,253,150 - 7,192,506 4,852 57,827 11,781 9,660 8,808,166 Additions (at cost) 1,702 2,363 - 178,556 621 23,684 3,917 22,894 233,737 Disposals (NBV) - - - (113) - (3,841) (75) - (4,029)Depreciation charge - (46,354) - (827,986) (833) (12,178) (4,377) (8,400) (900,128)Closing net book value (refer note 5.1) 280,092 1,209,159 - 6,542,963 4,640 65,492 11,246 24,154 8,137,746

Gross carrying value basisCost 280,092 1,550,090 6,995 12,731,811 18,095 106,149 25,698 86,440 14,805,370 Accumulated depreciation / impairment - (340,931) (6,995) (6,188,848) (13,455) (40,657) (14,452) (62,286) (6,667,624)Net book value 280,092 1,209,159 - 6,542,963 4,640 65,492 11,246 24,154 8,137,746

Year ended June 30, 2013

Net carrying value basisOpening net book value (NBV) 278,390 1,286,150 - 7,598,245 5,872 46,211 11,537 12,661 9,239,066 Additions (at cost) - 13,028 - 418,954 87 25,886 5,752 5,704 469,411 Disposals (NBV) - - - (239) - (4,003) - - (4,242)Depreciation charge - (46,028) - (824,454) (1,107) (10,267) (5,508) (8,705) (896,069)Closing net book value (refer note 5.1) 278,390 1,253,150 - 7,192,506 4,852 57,827 11,781 9,660 8,808,166

Gross carrying value basisCost 278,390 1,547,727 6,995 12,565,304 17,474 92,964 44,724 65,384 14,618,962 Accumulated depreciation / impairment - (294,577) (6,995) (5,372,798) (12,622) (35,137) (32,943) (55,724) (5,810,796)Net book value 278,390 1,253,150 - 7,192,506 4,852 57,827 11,781 9,660 8,808,166

Depreciation rate % per annum - 2.5 to 10 20 5 to 20 10 to 20 20 10 to 33 20 to 33

5.1 The cost of fully depreciated assets which are still in use as at June 30, 2014 amounts to Rs. 1,978 million and written down value amounts to Rs. 3.11 million (2013: Rs. 1,834 million and written down value amounted to Rs. 3.81 million).

5.2 Plant and machinery includes gas pipeline installations with a cost of Rs. 16.87 million (written down value: Nil) [2013: Rs. 16.87 million (written down value: Nil)] which have been installed outside the premises of the factory and which are under the possession and control of the Sui Northern Gas Pipelines Limited. However, the economic benefits associated with these assets are flowing to the Company.

5.3 Plant and machinery includes capital spares amounting to Rs. 251.77 million (written down value Rs. 177.22 million) [2013: Rs. 160.37 million (written down value Rs. 101.68 million)].



2014 2013Note (Rupees in thousands)

5.4 The depreciation charge for the year has been allocated as follows:

Cost of sales 27 873,778 873,884 General and administrative expenses 28 24,697 20,990 Selling and distribution expenses 29 1,653 1,195

900,128 896,069


5.5 The following operating fixed assets were disposed off during the year:

Description CostAccumulateddepreciation

Net bookvalue

Sale proceeds

Mode ofdisposal

(Note 5.5.1 & 5.5.2)Particulars of buyers


Plant and machinery

Mini Tube Well 168 55 113 - Written off

Items having book value upto Rs. fifty thousand 11,883 11,883 - 235 Scrap Various

12,051 11,938 113 235

Vehicle

Suzuki Liana 1,001 701 300 435 Sale (Employee) Mr. Muhammad Akhtar

Honda Civic 1,240 680 560 690 Sale (Employee) Mr. Sabir Imtiaz

Suzuki Mehran 444 311 133 173 Sale (Employee) Mr. Haris Riaz Rana

Suzuki Potohar 678 542 136 460 Sale (Employee) Mr. Kashif Abbasi

Suzuki Cultus 855 599 257 260 Sale (Employee) Mr. M Arshad Mehmood

Toyota Corolla 1,269 888 381 703 Sale (Employee) Mr. Muhammad Asif

Suzuki Mehran 494 346 148 162 Sale (Employee) Mr. Shahzad Ahmed

Toyota Corolla GLI 1,389 972 417 455 Sale (Employee) Mr. Nadeemullah

Suzuki Cultus 842 589 253 276 Sale (Employee) Mr. Syed Azam Ali Shah

Suzuki Cultus 842 589 253 276 Sale (Employee) Mr. Tahir Tanveer

Suzuki Cultus 995 197 798 839 Sale (Negotiation) Ms. Tahira Parveen

Items having book value upto Rs. fifty thousand 448 242 207 398 Scrap Various

10,497 6,656 3,843 5,127

Electrical and other equipment

Items having book value upto Rs. fifty thousand 22,518 22,443 75 15 Scrap Various

Computers

Items having book value upto Rs. fifty thousand 1,836 1,836 - 138 Scrap Various

Total - 2014 46,902 42,873 4,031 5,515

Total - 2013 35,357 31,115 4,242 5,794

5.5.1 Certain assets were retired during the year and sold as bulk scrap. Consequently, it is not practicable to assign sale proceeds to these retired assets individually.

5.5.2 The vehicles were sold to employees under the Company car scheme.



2014 2013 Note (Rupees in thousands)

6 CAPITAL WORK-IN-PROGRESS

This comprises of:Civil works 17,852 527 Plant and machinery 176,383 40,046 Advances to suppliers 5,590 7,959 Other directly attributable cost 6.2 2,700 -

202,525 48,532 6.1 Movement of carrying amount

6.2 This refers to arrangement fee for borrowings obtained for qualifying assets.

7 INTANGIBLE ASSETS

Computer softwares 2,712 1,973 ERP Accounting Software - 9,430

7.1 2,712 11,403 7.1 Net carrying value basis

Opening net book value 11,403 23,038 Additions (at cost) 2,446 40 Amortization charge 28 (11,137) (11,675)Closing net book value 2,712 11,403

Gross carrying value basisCost 59,470 57,024 Accumulated amortization (56,758) (45,621)Net book value 2,712 11,403

Amortization rate % per annum 20 – 33.33 20 – 33.33

8 LONG-TERM LOANS AND ADVANCES

(Unsecured - considered good)Long-term loans 8.1 2,845 3,491 Long-term advance to supplier - 1,010

8.3 2,845 4,501

Building Plant and machinery

Total

(Rupees in thousands)Year end June 30, 2014Opening balance 527 48,005 48,532 Additions (at cost) 17,791 209,840 227,631 Transferred to operating fixed assets (466) (73,172) (73,638)Closing balance 17,852 184,673 202,525

Year end June 30, 2013Opening balance 1,705 198,073 199,778 Additions (at cost) 11,649 268,864 280,513 Transferred to operating fixed assets (12,827) (418,932) (431,759)Closing balance 527 48,005 48,532




8.1 Long-term loans

Due from employees 8.4 4,875 5,371 Current portion shown under current assets 12 (2,030) (1,880)

2,845 3,491 8.2 Outstanding period is as under:

More than one year but less than three years 1,811 1,972 More than three years 1,034 1,519

2,845 3,491

8.3 Chief Executive Officer and Directors have not taken any loans and advances from the Company.

8.4 These loans are granted to employees of the Company principally for purchase of motor vehicles which do not carry mark-up, in accordance with their terms of employment.


9 STORES AND SPARES

Stores 9.1 577,151 523,561 Spares

in hand 347,182 347,287 in transit 18,055 25,213

365,237 372,500 942,388 896,061

Provision for slow moving stores and spares 9.2 (31,932) (29,326)9.3 910,456 866,735

9.1 This includes fuel for power and steam generation amounting to Rs. 104.346 million ( 2013: Rs. 28.91 million).


9.2 Provision for slow moving stores and spares comprises:

Balance at the beginning of the year 29,326 28,736 Recognized during the year 27 4,400 4,800 Written off during the year (1,794) (4,210)Balance at the end of the year 31,932 29,326

9.3 Stores and spares also include items which may result in capital expenditure but are not distinguishable at the time of purchase. However, the stores and spares consumption resulting in capital expenditure are capitalized in cost of respective assets.




12 LOANS AND ADVANCES

(Unsecured - considered good)Loans

Current portion of long-term loans 8.1 2,030 1,880 Advances

to employees 12.1 1,703 1,080 to suppliers 19,012 33,269

20,715 34,349 12.2 22,745 36,229

12.1 This includes advances provided to employees to meet business expenses and are settled as and when the expenses are incurred.


10 STOCK-IN-TRADE

Raw materials in hand 1,555,638 1,448,977 in transit 437,110 385,940

1,992,748 1,834,917 Work-in-process 439,789 114,192 Finished goods 130,876 66,657

2,563,413 2,015,766 11 TRADE DEBTS

(Unsecured - considered good)Due from associated undertakings 11.1 79,373 117,461 Others 927,380 1,067,310

1,006,753 1,184,771 11.1 This comprises of amounts receivable from:

Merit Packaging Limited 41,629 74,222 Colgate-Palmolive (Pakistan) Limited 36,724 42,975 Tetley Clover (Private) Limited 1,020 264

79,373 117,461

11.2 The aging of related party balances at the balance sheet date is as follows:

Not past due 75,249 57,024 Past due by 1 to 15 days 3,565 47,676 Past due by 16 to 30 days 559 12,761

79,373 117,461

11.3 The maximum amount due from related parties at the end of any month during the year was Rs. 214.55 million (2013: Rs. 169.35 million).


12.2 Chief Executive Officer and Directors have not taken any loans and advances from the Company.


13 TRADE DEPOSITS AND SHORT TERM PREPAYMENTS

Deposits 115 200 Prepayments 3,197 11,641

3,312 11,841

14 OTHER RECEIVABLES

(Unsecured - considered good)Due from associated undertakings

Insurance agency commission 177 459 Others 495 1,090

14.1 672 1,549 Others 1,316 9,510

1,988 11,059 14.1 This comprises of amounts receivable from:

Century Insurance Company Limited 615 805 Cyber Internet Service (Private) Limited 57 - Colgate-Palmolive (Pakistan) Limited - 744

672 1,549 15 TAXATION - NET

15.1 The income tax assessments of the Company have been finalized upto tax year 2012 (accounting year ended June 30, 2012). Return for the tax year 2013 has been duly filed and adequate provisions have been made in these financial statements for the year ended June 30, 2014 (Tax year 2014).

15.2 Deputy Commissioner Inland Revenue has made certain disallowances for expenses for the tax year 2009, 2011 and 2012 which resulted in reduction of tax losses available to the Company for respective years. The Company has filed appeals against orders of the Deputy Commissioner, Inland Revenue before Income Tax Appellate Tribunal which are pending adjudication.


16 CASH AND BANK BALANCES

At banks In current accounts 63,891 71,934

In handcash 5,084 5,227

68,975 77,161




17 ORDINARY SHARES

Number of ordinary 2014 2013 shares of Rs. 10/- each Note (Rupees in thousands)2014 2013

77,678,857 77,678,857 Fully paid in cash 776,790 776,790

43,542,501 27,638,731 Issued as fully paid bonus shares

17.1 435,425 276,387

Issued due to conversion of preference shares 25,089,437 - 17.2 250,894 -

Issued under scheme of amalgamation 707,550 707,550 7,075 7,075

147,018,345 106,025,138 1,470,184 1,060,252

Shares held by associated companies and related parties 100,229,748 65,337,644 1,002,297 653,376

17.1 During the year, the Company issued 15,903,770 ordinary shares as fully paid bonus shares by announcing 15% bonus issue (i.e. three bonus share for every 20 shares held) by appropriating the share premium account.

17.2 During the year, the Company issued 25,089,437 ordinary shares of Rs. 10 each due to conversion of preference shares as detailed in note 18.1(b).

18 PREFERENCE SHARES

Number of preference 2014 2013 shares of Rs. 10/- each (Rupees in thousands)2014 2013

300,404,561 300,404,561 Fully paid in cash 3,004,046 3,004,046 (135,182,070) (90,121,386) Redeemed through cash /

right shares (1,351,821) (901,214) (75,101,140) - Converted during the year (751,011) - 90,121,351 210,283,175 901,214 2,102,832

Shares held by associated companies 90,121,351 209,228,512 901,214 2,092,285

18.1 In November 2009, the Company issued 300,404,561 preference right shares of the face value of Rs. 10 each, in the proportion of 4.25 preference shares for every ordinary share held. These shares are not listed on any of the stock exchanges in Pakistan. During the year, the Company has redeemed / converted preference shares as follows:

a) The Company has redeemed preference shares amounting to Rs. 450.61 million (2013: Rs. 901.21 million) through cash and proceeds from right shares. In this redemption, the preference shares were fully redeemed to the shareholders whose holding was less than 5% on the date of redemption as per the terms, conditions, rights and privileges of the preference shares. The Company has also paid cumulative preference dividend in arrears amounting to Rs. 236.99 million on prorata basis upto the date of redemption on the preference shares redeemed during the year.


b) The Company has exercised conversion option of 25% (the maximum conversion available in the terms of issue) of the initial issue size. The Company has converted 75,101,140 preference shares along with cumulative preference dividend in arrears on prorata basis amounting to Rs. 433.11 million into 25,089,437 ordinary shares as per conversion formula defined in rights, privileges, terms and condition of preference shares.

18.2 The following are the terms, conditions, rights and privileges of preference shares with amendments which became effective on July 01, 2013.

a) Annual dividends will be payable when and if declared by the Company but shall be paid on cumulative basis prior to any dividend or other distribution payable to the ordinary shareholders. The dividend rate will be based on six months KIBOR plus spread of 1% per annum subject to cap of 13% per annum on the face value of the preference shares on cumulative basis. The cumulative dividend as at the balance sheet date amounted to Rs. 528.16 million (June 30, 2013: Rs. 997.60 million).

b) The preference shareholders do not have any voting rights and are not entitled to receive any notice for meeting of shareholders and will not be entitled to any rights in respect of subscription of further issue of ordinary shares of the Company.

c) The Company shall have the option to redeem the preference shares in full or in any proportion by giving fourteen days notice. The redemption will be subject to the payment of cumulative unpaid dividend, if any, on the part being redeemed up to the applicable date of redemption notice. The redemption will be subject to compliance with the provisions of Section 85 of the Companies Ordinance, 1984.

2014 2013(Restated)

Note (Rupees in thousands)19 RESERVES

Capital Share premium 19.1 1,822,122 1,047,935 Capital redemption reserve 19.2 931,254 480,647 Merger reserve 19.3 7,925 7,925

2,761,301 1,536,507 Revenue

General reserve 313,226 313,226 Un-appropriated profit 298,765 806,279

611,991 1,119,505 3,373,292 2,656,012

19.1 This reserve can be utilized by the Company only for the purposes specified in Section 83(2) of the Companies Ordinance, 1984.

19.2 This represents reserve created for the purpose of redemption of preference shares through cash to comply with Section 85(c) of the Companies Ordinance, 1984. During the year, the Company has transferred an amount of Rs. 450.61 million to redemption reserve on redemption of preference shares (refer note 18.1).

19.3 This represents amount arising under scheme of arrangement for amalgamation of former Century Power Generation Limited, a subsidiary, with the Company.

19.4 Movement of reserves have been reflected in the statement of changes in equity.




20 LONG-TERM FINANCING

From banking companies - securedUtilized under mark-up arrangements

Financed by:Consortium of Banks - Musharaka 20.1 1,500,000 1,500,000

Term LoansAllied Bank Limited 20.2 1,425,000 1,500,000 Faysal Bank Limited 20.3 54,166 135,000 Bank Alfalah Limited 20.4 150,682 289,773

1,629,848 1,924,773 3,129,848 3,424,773

From associated undertaking - Unsecured 20.7 1,000,000 1,000,000 4,129,848 4,424,773

Less: Current portion shown under current liabilities (782,424) (274,091) 3,347,424 4,150,682

20.1 This represents Diminishing Musharaka Arrangement with a Consortium of Meezan Bank Limited and Al Baraka Bank (Pakistan) Limited amounting to Rs. 1,500 million. The tenor of the facility is six years with one year grace period. This finance facility is repayable in twenty equal quarterly installments commencing from August 2014.

The finance facility is secured by way of mortgage of immovable properties of the Company and pari passu hypothecation charge over the assets pertaining to Board Machine (PM-7) with 25% margin.

The rate of mark-up is equal to base rate plus 0.9%. Base rate is equal to three months KIBOR of the last one business day prior to the beginning of each installment period. During the year the effective mark-up rate was 10.54% (2013: 10.44%) per annum.

20.2 This term finance facility has been obtained from Allied Bank Limited amounting to Rs. 1,500 million. The tenor of the facility is six years including one year grace period. This finance facility is repayable in twenty equal quarterly installments which commenced from June 2014.

The finance facility is secured by way of mortgage of immovable properties of the Company and pari passu hypothecation charge over the assets pertaining to Board Machine (PM-7) with 25% margin.

The rate of mark-up is equal to base rate plus 0.9%. Base rate is equal to average of three months KIBOR of the last six business days prior to the beginning of each installment period. During the year, the effective mark-up rate was 10.60% (2013: 10.38%) per annum.

20.3 This term finance facility has been obtained from Faysal Bank Limited amounting to Rs. 180 million specifically for New Box Making Machine and Coal Fired Boiler. The tenor of the facility is four years with twelve months grace period. The finance facility is repayable in twelve equal quarterly installments which commenced from December 2012.

The finance facility is secured by way of exclusive charge on New Box Making Machine and Coal Fired Boiler with 25% margin.

The rate of mark-up is 1.50% over three months KIBOR of last day of preceding quarter. During the year, the effective mark-up rate was 11.06% (2013: 11.79%) per annum.



20.4 These term finance loans have been obtained from Bank Alfalah Limited (Islamic Banking) amounting to Rs. 382.50 million specifically for refurbishment of Gas Turbine Generators. The tenor of the facility is three years and these are repayable in eleven equal quarterly installments.

These finance facilities are secured by way of exclusive charge on respective Gas Turbine Generators with 20% margin.

The rate of mark-up is 1.25% over three months KIBOR of last day of preceding quarter. During the year, the effective mark-up rate was 10.82% (2013: 11.32%) per annum.

20.5 During the year, the Company has entered into syndicated term financing agreement with MCB Bank Limited and Allied Bank Limited amounting to Rs. 1,500 million for acquisition of 18 MW Coal Based Co-Generation Power Plant. The tenor of the facility is seven years with two years grace period. This finance facility is repayable in twenty equal quarterly installments.

The finance facility is secured by way of mortgage of immovable properties of the Company and ranking hypothecation charge over all assets belonging to the Company with 25% margin.

The rate of mark-up is equal to base rate plus 0.75%. Base rate is equal to three months KIBOR of the last one business day prior to the beginning of each installment period. The available facility is not utilized as at the balance sheet date.

20.6 During the year, the Company has also entered into Diminishing Musharaka Arrangement with Meezan Bank Limited amounting to Rs. 750 million for acquisition of 18 MW Coal Based Co-Generation Power Plant. The tenor of the facility is seven years with two years grace period. This finance facility is repayable in twenty equal quarterly installments commencing from 27th month from the facility effective date. The available facility is not utilized as at the balance sheet date.


The finance facility is secured by way of mortgage of immovable properties of the Company and ranking hypothecation charge over all assets belonging to the Company with 25% margin.

The rate of mark-up is equal to base rate plus 0.75%. Base rate is equal to three months KIBOR of the last one business day prior to the beginning of each installment period.

20.7 This loan has been obtained from SIZA Commodities (Private) Limited, an associated undertaking, amounting to Rs. 1,000 million. The loan is repayable on July 31, 2016.

The rate of mark-up is 0.9% over average of three months KIBOR of the last one day of preceding quarter. During the year, the effective mark-up rate was 10.59% (2013: 10.41%) per annum.

2014 2013(Restated)


21 DEFERRED TAXATION

Deferred taxation 21.1 661,069 539,848



21.1 The net balance for deferred taxation is in respect of following temporary differences:

2014 2013(Restated)

Note (Rupees in thousands)Deferred tax liabilities

Accelerated tax depreciation allowance 1,713,945 1,881,920

Deferred tax assets

Tax losses carried forward 627,693 1,078,522 Turnover tax / Alternative corporate tax 396,647 242,923 Provision for slow moving stores and spares 10,537 9,971 Others 17,999 10,656

(1,052,876) (1,342,072) 661,069 539,848

22 TRADE AND OTHER PAYABLES

Creditors 22.1 315,141 296,636 Foreign bills payable 274,454 257,984 Accrued liabilities 177,869 201,231 Sales tax payable - net 14,884 56,991 Customers’ balances 34,745 35,491 Provident fund payable 4,854 4,431 Gratuity payable 35.4 54,543 31,339 Workers’ profit participation fund 22.2 49,087 75,507 Workers’ welfare fund 18,653 44,805 Unclaimed dividend 734 735 Other liabilities 27,867 23,528

972,831 1,028,678

22.1 The aggregate amount of the outstanding balance of associated undertakings as at June 30, 2014 is Rs. 2.67 million (2013: Rs. 0.98 million).

2014 2013(Restated)


22.2 Workers’ Profit Participation Fund

Balance at July 01 75,507 42,403 Interest on funds utilized in Company’s business 32 770 3,587 Allocation for the year 30 49,087 75,507

125,364 121,497 Amount paid during the year (76,277) (45,990)Balance at June 30 49,087 75,507


24.2 The Company has available aggregate sub-limits for FE loans under facilities for running finance and letters of credit amounting to Rs. 2,830 million (2013: Rs. 2,830 million). This facility is priced at one month and three months LIBOR plus spread ranging between 1.50% to 3.75% per annum (2013: from 2.00% to 3.00% per annum).

24.3 These arrangements are secured by way of pari passu hypothecation charge created on stock-in-trade, stores and spares and trade debts of the Company.

24.4 Additional facilities for opening of letters of credit and guarantees amounting to Rs. 4,031 million (2013: Rs. 3,981 million) are available to the Company.

25 CONTINGENCIES AND COMMITMENTS

25.1 Contingencies

Guarantees

Guarantees have been issued by banks on behalf of the Company in the normal course of business aggregating to Rs. 367 million (2013: Rs. 355 million).

Sales tax

The Commissioner Inland Revenue (Appeals) has adjudicated an amount of Rs. 34.43 million as inadmissible input tax adjustment. The Company has filed an appeal against the orders in the Tax Appellate Tribunal. The Commissioner Inland Revenue (Sales Tax) has also passed an order that the Company has claimed / adjusted inadmissible input tax for an amount of Rs. 5.24 million against which an appeal has been filed before Commissioner Inland Revenue (Appeals). These cases have been remanded back to the Commissioner Inland Revenue (Sales Tax). No provision has been made in the financial statements for the liability that may arise in the event of a decision against the Company as the management is of the opinion, based on advice of tax advisor that the decision is likely to be in the favor of the Company.



23 INTEREST AND MARK-UP ACCRUED

Interest and mark-up accrued on:Long-term financing 52,040 28,357 Short-term borrowings 13,438 20,784

65,478 49,141

24 SHORT-TERM BORROWINGS

From banking companies - securedRunning finances 24.1 912,782 1,413,555 Import credit finances 24.2 692,239 -

24.3 1,605,021 1,413,555

24.1 The Company has available aggregate short-term running finance facilities amounting to Rs. 2,860 million (2013: Rs. 2,535 million). Mark-up rates are linked with KIBOR from one to three months plus spreads ranging from 0.70% to 1.50% per annum (2013: from 0.70% to 1.50% per annum).



25.2 Commitments

The Company’s commitments as at balance sheet date are as follows:

a) Letters of credit other than for capital expenditure at the end of the year amounted to Rs. 670.24 million (2013: Rs. 348.19 million).

b) Capital expenditure including letters of credit amounting to Rs. 1,571 million (2013: Rs. 11.86 million).

2014 2013(Restated)


26 SALES

Gross sales 17,132,230 16,512,551 Sales tax (2,464,561) (2,276,930)

14,667,669 14,235,621 27 COST OF SALES

Materials consumed 8,147,918 7,677,194 Fuel and power 2,553,246 1,677,012 Depreciation on property, plant and equipment 5.4 873,778 873,884 Salaries, wages and other benefits 27.1 526,763 510,255 Repairs, maintenance and stores consumption 587,914 573,478 Packing expenses 271,423 279,389 Insurance 65,908 67,396 Provision for slow moving stores and spares 9.2 4,400 4,800 Rent, rates and taxes 4,696 4,473 Manufacturing cost 13,036,046 11,667,881

Work-in-processOpening stock 114,192 161,370 Closing stock (439,789) (114,192)

(325,597) 47,178 Cost of goods manufactured 12,710,449 11,715,059

Finished goodsOpening stock 66,657 40,600 Closing stock (130,876) (66,657)

(64,219) (26,057) 12,646,230 11,689,002

27.1 Salaries, wages and other benefits include Rs. 33.06 million (2013: Rs. 34.56 million) in respect of staff retirement benefits.



2014 2013(Restated)


28 GENERAL AND ADMINISTRATIVE EXPENSES

Salaries and other benefits 28.1 200,740 190,371 Depreciation on property, plant and equipment 5.4 24,697 20,990 Amortization on intangible assets 7.1 11,137 11,675 Rent, rates and taxes 6,183 5,611 Information technology 26,577 17,498 Telephone and postage 3,463 3,548 Insurance 2,306 2,072 Repairs and maintenance 13,993 5,771 Electricity 9,914 7,221 Business promotion expenses 2,299 1,986 Printing, stationery and periodicals 6,115 6,663 Security service charges 21,016 17,799 Travelling and conveyance 14,337 11,980 Fees and subscription 8,355 5,848 Advertisement 84 509

351,216 309,542

28.1 Salaries and other benefits include Rs. 11.84 million (2013: Rs. 12.67 million) in respect of staff retirement benefits.

29 SELLING AND DISTRIBUTION EXPENSES

Selling expensesSalaries and other benefits 29.1 35,667 30,573 Insurance 365 404 Electricity 772 652 Depreciation on property, plant and equipment 5.4 1,653 1,195 Travelling and conveyance 1,311 1,847 Rent, rate and taxes 1,518 1,431 Telephone and postage 362 341 Advertisement 33 -

41,681 36,443 Distribution expenses

Outward freight 97,975 74,367 139,656 110,810

29.1 Salaries and other benefits include Rs. 2.44 million (2013: Rs. 2.27 million) in respect of staff retirement benefits.




30 OTHER OPERATING CHARGES

Legal and professional charges 7,508 9,664 Auditors’ remuneration

Statutory audit 725 675 Half yearly review 150 125 Fee for other services 135 148 Reimbursement of expenses 100 153

1,110 1,101 Workers’ Profit Participation Fund 22.2 49,087 75,507 Workers’ Welfare Fund 18,653 28,692 Net exchange loss 2,293 784 Donation 30.1 25,000 - Others 3,222 1,331

106,873 117,079

30.1 During the year, a donation was paid to Hasanali and Gulbanoo Lakhani Foundation in which Mr. Iqbal Ali Lakhani, Mr. Zulfiqar Ali Lakhani and Mr. Amin Mohammed Lakhani, the Directors of the Company, are Trustees of the donee.

31 OTHER INCOME

Income from financial assetsProfit on bank deposit accounts 992 188

Income from non-financial assetsSale of scrap 90,798 71,957 Insurance agency commission from associated company 9,744 9,637 Gain on sale of operating fixed assets - net 1,485 1,552 Others 2,764 7,418

104,791 90,564 105,783 90,752

32 FINANCE COST

Finance cost:Long-term financing 351,172 395,951 Long-term financing from associated company / Sponsors 105,915 109,798 Short-term borrowings 160,403 142,198 Short-term loan from Sponsors - 26,671 Workers’ profit participation fund 22.2 770 3,587

618,260 678,205 Net exchange (gain) / loss on import credit finances (5,686) 9,282 Bank charges and commission 2,904 5,420

615,478 692,907



2014 2013(Restated)

33 TAXATION Note (Rupees in thousands)

For the yearCurrent 33.1 154,726 72,182 Deferred 129,424 406,235

284,150 478,417

33.1 Provision for current year represents Alternative Corporate Tax payable under Section 113(c) of the Income Tax Ordinance, 2001.

33.2 Numerical reconciliation between the applicable tax rate and average effective tax rate is as follows:

%age %age

Applicable tax rate 34.00 35.00 Tax effect of expenses that are not deductible indetermining taxable profit (permanent differences) 0.85 - Effect of final tax under presumptive tax regime (0.25) (0.17)Others (3.51) (0.83)

(2.91) (1.00)Average effective tax rate 31.09 34.00

34 EARNINGS PER SHARE - BASIC AND DILUTED

34.1 Basic earnings per share

The earnings per share as required under IAS 33 “Earnings per share” is given below:

2014 2013(Restated)


Profit for the year 629,849 928,616 Less: Dividend attributable to cumulative preference shares (200,650) (382,502)Profit attributable to ordinary shareholders 429,199 546,114 Weighted average number of ordinary shares (in thousands) 124,060 103,086 Earnings per share attributable to ordinary shareholders (Rupees) 3.46 5.30

34.2 Diluted earnings per share

The dilutive impact of potential ordinary shares on earnings per share as required under IAS 33 “Earnings per share” is given below:

Profit attributable to ordinary shareholders 429,199 546,114 Dividend for the year on convertible preference shares 76,820 -

506,019 546,114 Weighted average number of ordinary shares 124,060 103,086

Weighted average number of shares from conversionof preference shares 22,958 -

147,018 103,086 Diluted earnings per share 3.44 5.30


35 DEFINED BENEFIT PLAN

35.1 General description

The scheme provides for terminal benefits for all its permanent employees who attain the minimum qualifying period at varying percentages of last drawn basic salary. The percentage depends on the number of service years with the Company. Annual charge is based on actuarial valuation carried out as at June 30, 2014 using the Projected Unit Credit Method.

The Company faces the following risks on account of gratuity:

Final salary risk - The risk that the final salary at the time of cessation of service is greater than what the Company has assumed. Since the benefit is calculated on the final salary, the benefit amount would also increase proportionately.

Asset volatility - Most assets are invested in risk free investments i.e. Government Bonds / Treasury Bills. However, investments in equity instruments is subject to adverse fluctuations as a result of change in the market price.

Discount rate fluctuation - The plan liabilities are calculated using a discount rate set with reference to corporate bond yields. A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the current plans’ bond holdings.

Investment risks - The risk of the investment underperforming and not being sufficient to meet the liabilities. This risk is mitigated by closely monitoring the performance of investment.

Risk of insufficiency of assets - This is managed by making regular contribution to the Fund as advised by the actuary.

35.2 Principal actuarial assumptions

Followings are a few important actuarial assumptions used in the valuation:

2014 2013%age %age

Discount rate 13.25 10.50 Expected rate of return on plan assets 10.50 13.00 Expected rate of increase in salary 13.25 10.50

2014 2013(Restated)


35.3 Reconciliation of balance due to defined benefit plan

Present value of defined benefit obligation 290,778 239,310 Fair value of plan assets (236,235) (207,971)Closing net liability 54,543 31,339



2014 2013(Restated)

Note (Rupees in thousands)35.4 Movement of the liability recognized in the balance sheet

Opening net liability 31,339 30,209 Charge for the year 35.8 18,383 23,299 Remeasurement chargeable to other comprehensive income 35.9 24,859 2,476 Contribution made during the year (20,038) (24,645)Closing net liability 22 54,543 31,339

35.5 Fair value of plan assets at year end

Government securities 193,886 101,139 Term Finance Certificates / Certificates of Investment 1,962 1,962 Mutual funds / Shares 31,283 30,865 Cash at banks 9,471 75,769 Others (367) (1,764)

236,235 207,971 35.6 Movement in present value of defined benefit obligations

Opening present value of defined benefit obligations 239,310 202,040 Current service cost for the year 16,349 19,371 Interest cost for the year 24,654 26,265 Benefits due but not paid during the year (368) (1,765)Benefits paid during the year (8,643) (5,134)Remeasurement gain / (loss) on obligation 19,476 (1,467)Closing present value of defined benefit obligations 290,778 239,310

35.7 Movement in fair value of plan assets

Opening fair value of plan assets 207,971 171,831 Expected return on plan assets 22,620 22,337 Contributions during the year 20,038 24,645 Benefits paid during the year (8,643) (5,134)Benefits due but not paid during the year (368) (1,765)Remeasurement loss on plan assets (5,383) (3,943)Closing fair value of plan assets 236,235 207,971

35.8 Charge for the year

Current service cost 16,349 19,371 Interest cost 24,654 26,265 Expected return on plan assets (22,620) (22,337)Charge for the year 18,383 23,299

35.9 Remeasurement chargeable to other comprehensive income

Remeasurement gain / (loss) obligation 19,476 (1,467)Remeasurement loss on plan assets 5,383 3,943

24,859 2,476 Tax impact at 33% (2013: 34%) (8,203) (842)

16,656 1,634




35.10 Comparison for five years

35.11 Sensitivity analysis

The impact of 1% change in following variables on defined benefit obligation is as follows:

Increase in Assumption

Decrease in Assumption

Discount rate (19,768) 22,439 Salary increase 22,655 (20,318)

35.12 Maturity Profile

Time in year1 40,499 2 22,925 3 23,003 4 21,293

5-10 289,679

Weighted average duration 7 years

35.13 The charge in respect of defined benefit plan for the year ending June 30, 2015 is estimated to be Rs. 25.478 million.

36 DEFINED CONTRIBUTION PLAN

The Company has contributory provident fund scheme for benefit of all its permanent employees under the title of “Century Paper & Board Mills Limited - Employees Contributory Provident Fund”. The Fund is maintained by the Trustees and all decisions regarding investments and distribution of income etc. are made by the Trustees independent of the Company.

36.1 The Trustees have intimated that the size of the Fund at year end was Rs. 345.38 million (2013: Rs. 336.34 million).

2013-14 2012-13 2011-12 2010-11 2009-10(Rupees in thousands)

Present value of defined benefitsobligation and fair value of plan assets

Present value of defined benefits obligations at year end 290,778 239,310 202,040 161,064 133,868 Fair value of plan assets at year end 236,235 207,971 171,831 133,199 100,507

(54,543) (31,339) (30,209) (27,865) (33,361)



36.2 As intimated by the Trustees, the cost of the investments made at year end was Rs. 333.69 million (2013: Rs. 317 million) which is equal of 96% of the total fund size. The fair value of the investments was Rs. 346.05 million (2013: Rs. 325.45 million) at that date. The category wise break up of investment as per Section 277 of the Companies Ordinance, 1984 is given below:

36.3 According to the Trustees, investments out of provident fund have been made in accordance with the provisions of Section 227 of Companies Ordinance, 1984 and the rules made there under.

2014 2013(Restated)


37 CASH GENERATED FROM OPERATIONS

Profit before taxation 913,999 1,407,033 Adjustment for non-cash charges and other items:

Depreciation on property, plant and equipment 900,128 896,069 Amortization of intangible assets 11,137 11,675 Gain on sale of operating fixed assets (1,485) (1,552)Provision for gratuity 18,383 23,299 Provision for slow moving / obsolete stores and spares 4,400 4,800 Workers’ Profit Participation Fund 49,087 75,507 Profit on bank deposit accounts (992) (188)Finance cost 32 615,478 692,907 Working capital changes 37.1 (527,461) (365,499)

1,982,674 2,744,051

37.1 Changes in working capital

(Increase) / decrease in current assets:

Stores and spares (139,542) (17,780)Stock-in-trade (547,647) (343,439)Trade debts 178,018 (138,595)Loans and advances 13,484 (20,817)Trade deposits and short-term prepayments 8,529 (8,502)Other receivables 9,071 132,534 Tax refunds due from Government 44,806 -

(433,281) (396,599)(Decrease) / increase in current liabilities:

Trade and other payables (94,180) 31,100 (527,461) (365,499)

2014 2013

Rupees in thousands

Percentage Rupees in thousands

Percentage

Government securities 272,045 79 255,200 76 Term Finance Certificates 504 - 2,166 1 Listed Securities (Mutual funds) 73,501 21 68,085 20

346,050 100 325,451 97


38 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

a) The aggregate amount charged in the financial statements for remuneration, including all benefits to Chief Executive, Directors and Executives of the Company is as follows:

2014 2013

ChiefExecutive

Director Executives TotalChief

ExecutiveDirector Executives Total


Managerial remuneration 6,882 9,060 86,602 102,544 6,224 9,060 73,007 88,291

House rent 3,097 - 36,286 39,383 2,801 - 30,597 33,398

Bonus 1,093 - 12,069 13,162 1,777 - 12,965 14,742

Staff retirement benefits 1,591 - 14,416 16,007 2,157 - 17,958 20,115

Medical 688 900 8,660 10,248 622 900 7,301 8,823

Utilities - 2,884 379 3,263 - 2,266 335 2,601

Others 7 - 2,667 2,674 8 - 588 596

Total 13,358 12,844 161,079 187,281 13,589 12,226 142,751 168,566

Number of persons 1 1 77 79 1 1 70 72

b) Aggregate amount charged in these financial statements in respect of Directors’ fee for attending Board and Audit Committee meetings amounted to Rs. 95,000 (2013: Rs. 17,000) and Rs. 125,000 (2013: 25,000) respectively. The Directors fees for attending Board and Audit Committee meetings were paid as prescribed in Articles of Association.

c) The Chief Executive and certain executives are also provided with cars for business and personal use in accordance with the Company car scheme.

d) Remuneration to Non-Executive Director relates to amount paid for part time involvement in the Company.




39 TRANSACTIONS AND BALANCES WITH RELATED PARTIES

The related parties and associated undertakings comprise group companies, other associated companies, staff retirement funds, directors and key management personnel. Transactions with related parties and associated undertakings are as under:

2014 2013Relation with the Company Nature of transaction Note (Rupees in thousands)

Associated companies Sales of goods and services 1,620,937 1,293,029 Purchase of goods and services 170,815 155,003 Rent and other allied charges 6,277 5,924 Donation 25,000 - Insurance agency commission 9,745 9,637 Insurance claim - 50 Insurance claim received - 132,500 Issue of bonus shares 97,890 86,236 Issue of right shares - 135,181 Conversion of preference shares 751,011 - Redemption of preference shares 440,184 896,744 Dividend paid on preference shares 231,510 417,444 Long-term financing obtained - 1,000,000 Mark-up accrued 105,915 -

Sponsors and Directors Mark-up accrued - 136,468 Issue of bonus shares 48 56 Issue of right shares - 27 Redemption of preference shares 318 126 Dividend paid on preference shares 167 59 Repayment of long-term financing - 1,000,000 Repayment of short-term financing - 300,000

Retirement benefit plans Contribution to staff retirement

benefit plans 47,752 49,809

Key management personnel Remuneration and other benefits 38 187,281 168,566

39.1 Year end balances

Receivable from related parties 80,045 119,010 Payable to related parties 62,070 877 Long-term financing from associated undertaking 1,000,000 1,000,000 Mark-up payable on Sponsors’ loan 27,624 3,715

39.2 The details of compensation paid to key management personnel are shown under the heading of “Remuneration of Chief Executive, Directors and Executive (note 38)”. There are no transactions with key management personnel other than under their terms of employment.


39.3 All transactions with related parties have been carried out on commercial terms and conditions.

40 CAPACITY AND PRODUCTION - TONNES

2014 2013Annual

Actual production

AnnualActual

productioncapacity capacityon three on three

shifts shifts

Paper and paper board produced (Note: 40.1) 240,000 175,461 240,000 185,530

Paper and paper board conversion 30,000 26,011 30,000 24,206

40.1 The Company could not achieve the installed capacity because of forced shutdown of plant due to gas shortages during the year.

41 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

41.1 Risk management policies

The Company’s objective in managing risks is the creation and protection of shareholders’ value. Risk is inherent in the Company’s activities, but it is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. The process of risk management is critical to the Company’s continuing profitability. The Company is exposed to credit risk, liquidity risk and market risk (which includes interest rate risk and price risk) arising from the financial instruments it holds.

The Company finances its operations through equity, borrowings and management of working capital with a view to maintaining an appropriate mix between various sources of finance to minimize risk.

41.2 Credit risk

Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties fail to perform as contracted and arises principally from trade and other receivables. The Company’s policy is to enter into financial contracts with reputable counter parties in accordance with the internal guidelines and regulatory requirements.

Exposure to credit risk

The carrying amounts of the financial assets represent the maximum credit exposures. Out of total financial assets of Rs. 1,085.54 million (2013: Rs. 1,272.98 million), the financial assets which are subject to credit risk amounted to Rs. 1,080.46 million (2013: Rs. 1,267.76 million). The carrying amounts of financial assets exposed to credit risk at reporting date are as under:



2014 2013(Rupees in thousands)

Loans and deposits 7,819 8,400 Trade debts 1,006,753 1,184,771 Other receivables 1,988 2,652 Bank balances 63,891 71,934

1,080,451 1,267,757 The aging of trade receivable at the reporting date is:

Not past due 741,213 888,559 Past due 1-30 days 231,092 259,087 Past due 30-90 days 29,215 30,265 Past due 90 days 5,233 6,860

1,006,753 1,184,771

To manage exposure to credit risk in respect of trade receivables, management performs credit reviews taking into account the customer’s financial position, past experience and other factors. Where considered necessary, advance payments are obtained from certain parties. Sales made to certain customers are secured through letters of credit.

The exposure to banks is managed by dealing with variety of major banks and monitoring exposure limits on continuous basis. The ratings of banks ranges from A to AAA.

Concentration of credit risk

Concentration of credit risk arises when a number of counter parties are engaged in similar business activities or have similar economic features that would cause their abilities to meet contractual obligation to be similarly affected by the changes in economic, political or other conditions. The Company believes that it is not exposed to major concentration of credit risk.

Impaired assets

During the year no assets have been impaired.

41.3 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stress conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The following are the contractual maturities of financial liabilities, including interest payments and excluding the impact of netting agreements, if any:


Carrying amount

Contractual Cash Flows

Six months or less

Six to Twelve months

One to two years

Two to five years

Over five years

(Rupees in thousands)2014 Long-term financing 4,129,848 5,181,578 592,033 591,389 966,129 3,032,027 - Trade and other payables 730,624 730,624 730,624 - - - - Interest and mark-up accrued 65,478 65,478 65,478 - - - - Short-term borrowings 1,605,021 1,414,559 1,414,559 - - - -

6,530,971 7,392,239 2,802,694 591,389 966,129 3,032,027 -



41.4 Market risk

Market risk is the risk that changes in market price, such as foreign exchange rates, interest rates and equity prices will effect the Company’s income or the value of its holdings of financial instruments. The Company is not exposed to price risk.

a) Currency risk

Foreign currency risk is the risk that the future cash flow of financial asset or a liability will fluctuate due to a change in foreign exchange rates. It arises mainly where receivables and payables exist due to transactions entered into in foreign currencies. The Company’s exposure to foreign currency risk is as follows:


Foreign bills payable 274,454 257,984 Import credit finances 692,239 - Gross balance sheet exposure 966,693 257,984 Outstanding letter of credits 2,104,402 353,337 Net exposure 3,071,095 611,321

The following significant exchange rates have been applied.

Average rate Reporting date rate2014 2013 2014 2013

Rupees

USD to PKR 103.00 97.24 98.87 99.50

At reporting date, if the PKR had strengthened by 10% against the US Dollar with all other variables held constant, post-tax profit for the year would have been higher / lower by the amount shown below, mainly as a result of net foreign exchange gain on net foreign currency exposure at reporting date.

Average rate Reporting date rate2014 2013 2014 2013


Effect on profit 108,707 38,856 104,348 39,759

The weakening of the PKR against US Dollar would have had an equal but opposite impact on the post-tax profit.

Carrying amount

Contractual Cash Flows

Six months or less

Six to Twelve months

One to two years

Two to five years

Over five years

(Rupees in thousands)2013 Long-term financing 4,424,773 5,762,556 299,981 394,594 1,194,737 3,224,366 648,878 Trade and other payables 739,547 739,547 739,547 - - - - Interest and mark-up accrued 49,141 49,141 49,141 - - - - Short-term borrowings 1,413,555 1,417,155 1,417,155 - - - -

6,627,016 7,968,399 2,505,824 394,594 1,194,737 3,224,366 648,878


The sensitivity analysis prepared is not necessarily indicative of the effects on profit for the year and assets / liabilities of the Company.

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Majority of the interest rate exposure arises from long-term loans and short-term borrowings. At the balance sheet date the interest rate profile of the Company’s interest -bearing financial instruments is as follows:

2014 2013 2014 2013Effective rate Carrying amount(In percent) (Rupees in thousands)

Financial liabilitiesVariable rate instruments

Long-term loans 10.54 to 11.06 10.38 to 11.79 4,129,848 4,424,773 Short-term borrowings 9.67 to 10.02 10.04 to 10.69 1,605,021 1,413,555

Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates at the reporting date would have decreased / (increased) profit for the year by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for the prior year.

Profit and loss (post tax)100 bps 100 bpsincrease decrease

(Rupees in thousands)As at June 30, 2014

Cash flow sensitivity - Variable rate financial liabilities (37,850) 37,850

As at June 30, 2013Cash flow sensitivity - Variable rate financial liabilities (37,949) 37,949

The sensitivity analysis prepared is not necessarily indicative of the effects on profit for the year and assets / liabilities of the Company.



41.5 Financial instruments by category

Financial assets (Loans and receivables at amortised cost)Long term loans and deposits 5,674 8,200Trade debts 1,006,753 1,184,771 Loans, advances and Trade deposits 2,145 200 Other receivables 1,988 2,652 Cash and bank balances 68,975 77,161

1,085,535 1,272,984 Financial liabilities ( Financial liabilities at amortised cost)Long term financing 4,129,848 4,424,773 Trade and other payables 730,624 739,547 Interest and mark-up accrued 65,478 49,141 Short-term borrowings 1,605,021 1,413,555

6,530,971 6,627,016


42 FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values. Fair value is determined on the basis of objective evidence at each reporting date. The financial instruments that are not traded in active market are carried at cost and are tested for impairment according to IAS 39. The carrying amount of trade receivables and payables are assumed to approximate their fair values.

The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company for similar financial instruments.

43 CAPITAL MANAGEMENT

The Company’s objectives when maintaining capital are to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders through the optimization of the debt and equity balance.

The Company sets the amount of capital it requires in proportion to risk. The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares or adjust the amount of dividends paid to shareholders.

The Company’s management believes in maintaining appropriate mix of debt and equity capital and monitors capital on the basis of the net debt to equity ratio. The net debt is defined as long and short term borrowings offset by cash and bank balances. The equity includes ordinary and preference share capital and all types of reserves that are managed as capital and subordinated loan.

44 DATE OF AUTHORIZATION FOR ISSUE

These financial statements were authorized for issue on August 22, 2014 by the Board of Directors of the Company.

45 CORRESPONDING FIGURES

Corresponding figures have been rearranged and reclassified, wherever necessary for the purpose of comparison and for better presentation. However, no significant reclassification has been made during the year.

Due to application of change in accounting policy retrospectively (refer note 4.25), the Company has presented third balance sheet at the beginning of the preceding period i.e. the opening position in accordance with requirements of IAS 1 “Presentation of Financial Statements”. Notes are not required to support this balance sheet.

46 NUMBER OF EMPLOYEES

The number of employees as at year end was 1,519 (2013: 1,643) and average number of employees during the year was 1,560 (2013: 1,646).

47 GENERAL

Amounts have been rounded off to the nearest thousands of rupees.





Pattern of Shareholdingas at June 30, 2014

Number of Shareholders

Shareholding Total Shares Held

From To

450 1 100 10,847

397 101 500 136,430

285 501 1,000 246,354

618 1,001 5,000 1,576,837

167 5,001 10,000 1,267,535

69 10,001 15,000 849,717

42 15,001 20,000 762,632

25 20,001 25,000 579,785

14 25,001 30,000 385,410

12 30,001 35,000 396,107

5 35,001 40,000 192,240

1 40,001 45,000 44,500

14 45,001 50,000 683,530

3 50,001 55,000 159,125

4 55,001 60,000 230,471

2 60,001 65,000 128,591

2 65,001 70,000 137,000

2 70,001 75,000 145,874

1 75,001 80,000 77,625

1 80,001 85,000 81,313

2 85,001 90,000 177,862

3 90,001 95,000 278,990

3 95,001 100,000 295,392

2 105,001 110,000 216,813

1 110,001 115,000 115,000

2 115,001 120,000 236,017

2 120,001 125,000 245,984

1 135,001 140,000 138,000

2 145,001 150,000 300,000

2 170,001 175,000 342,836

2 175,001 180,000 352,505

1 180,001 185,000 181,125

1 190,001 195,000 191,940

Number of Shareholders

Shareholding Total Shares Held

From To

3 195,001 200,000 591,879

1 200,001 205,000 204,930

2 210,001 215,000 427,031

1 260,001 265,000 262,410

1 275,001 280,000 278,000

1 305,001 310,000 305,500

2 340,001 345,000 690,000

1 355,001 360,000 356,500

1 400,001 405,000 400,153

1 405,001 410,000 405,500

1 430,001 435,000 434,010

1 440,001 445,000 441,600

1 560,001 565,000 563,902

1 595,001 600,000 600,000

1 600,001 605,000 603,000

1 625,001 630,000 629,495

1 700,001 705,000 700,536

1 795,001 800,000 800,000

1 820,001 825,000 824,550

1 1,005,001 1,010,000 1,005,100

1 1,335,001 1,340,000 1,337,325

1 1,795,001 1,800,000 1,798,500

1 1,850,001 1,855,000 1,853,386

1 1,870,001 1,875,000 1,871,050

2 2,815,001 2,820,000 5,634,000

1 2,890,001 2,895,000 2,892,618

1 3,250,001 3,255,000 3,253,537

1 9,030,001 9,035,000 9,033,731

1 12,390,001 12,395,000 12,390,648

1 12,495,001 12,500,000 12,499,634

1 32,610,001 32,615,000 32,614,961

1 40,150,001 40,155,000 40,150,472

2,175 TOTAL 147,018,345

Incorporation No. K-54/8182 of 1984CUIN Registration No. 0012021


Categories of ShareholdersAs at June 30, 2014

Shareholders’ Category Shares Held Percentage

Directors, CEO, and their spouse and minor children. 62,545 0.04

Associated Companies, undertakings and related parties 100,165,203 68.13

NIT and ICP 9,034,031 6.14

Public Sector Companies and Corporation 3,253,675 2.21

Banks, Development Financial Institutions, Non-Banking Financial Institutions 708,588 0.48

Modarabas and Mutual Funds 10,987,203 7.47

Insurance Companies 623,902 0.42

Share holders holding 10% or more 72,765,433 49.49

General Public 17,416,024 11.85

Others 13,800,905 9.39

Note: Some of the Shareholders are reflected in more than one category.


Information as required under the Code of Corporate Governance

Shareholders’ CategoryNumber of Shares

Held

ASSOCIATED COMPANIES / UNDERTAKINGS AND RELATED PARTIESSIZA Services (Private) Limited 32,614,961SIZA (Private) Limited 40,150,472Premier Fashions (Private) Limited 12,390,648SIZA Commodities (Private) Limited 12,499,634Accuray Surgicals Limited 1,853,386Century Insurance Company Limited 629,495Sultan Ali Lakhani 1,767Shaista Sultan Ali Lakhani 303Babar Ali Lakhani 18,901Bilal Ali Lakhani 151Danish Ali Lakhani 2,850Anushka Zulfiqar Lakhani 1,393Anika Amin Lakhani 1,242

MUTUAL FUNDSCDC-Trustee AKD Index Tracker Fund 11,500 CDC-Trustee AKD Opportunity Fund 215,000 CDC-Trustee JS Large Cap. Fund 800,000 CDC-Trustee Nafa Multi Asset Fund 150,000 CDC-Trustee Nafa Pension Fund Equity Sub-Fund Account 26,000 CDC-Trustee Nafa Stock fund 356,500 CDC- National Investment (UNIT) Trust 9,033,731 CDC-Trustee Nafa Asset Allocation Fund 278,000 Golden Arrow Selected Stocks Fund Limited 116,017 First Capital Mutual Fund 455

DIRECTORS, CEO, THEIR SPOUSES AND MINOR CHILDRENIqbal Ali Lakhani Chairman 2,167Zulfiqar Ali Lakhani Director 948Amin Mohammed Lakhani Director 1,606Tasleemuddin A. Batlay Director 3,417Shahid Ahmed Khan Director 1,724Kemal Shoaib Director 718 Aftab Ahmad Chief Executive Officer 4,718 Ronak Iqbal Lakhani W/o Iqbal Ali Lakhani 189 Fatima Lakhani W/o Zulfiqar Ali Lakhani 189 Saira Amin Lakhani W/o Amin Mohammed Lakhani 189 Roohi Aftab W/o Aftab Ahmad 46,680

EXECUTIVE 20

PUBLIC SECTOR COMPANIES AND CORPORATIONS 3,253,675

BANKS, DEVELOPMENT FINANCE INSTITUTIONS, NON-BANKING FINANCE COMPANIES, INSURANCE COMPANIES, TAKAFUL, MODARABA AND PENSION FUNDS

2,061,526

SHAREHOLDERS HOLDING 5% OR MORE VOTING RIGHTS IN THE COMPANYSIZA Services (Private) Limited 32,614,961SIZA (Private) Limited 40,150,472Premier Fashions (Private) Limited 12,390,648SIZA Commodities (Private) Limited 12,499,634CDC-Trustee National Investment (UNIT) Trust 9,033,731


Form of Proxy

Witness 2 Witness 1

Signature ________________________ Signature ________________________ Name ________________________ Name ________________________ CNIC No. ________________________ CNIC No. ________________________ Address ________________________ Address ________________________ ________________________ ________________________

Notes:

Signature overRevenue Stamp

I/We________________________________________________________________________________________

of __________________________________________________________________________________________

a member of__________________________________________________________________________________

CENTURY PAPER & BOARD MILLS LIMITED ______________________________________________________

hereby appoint _________________________________________________________________________________

of __________________________________________________________________________________________

or failing _____________________________________________________________________________________

him/her ______________________________________________________________________________________

of __________________________________________________________________________________________

to act as my/our proxy and to vote for me/us and on my/our behalf at the Annual General Meeting of the Shareholders of the Company to be held on the 13th day of October 2014 and at any adjournment thereof.

Signed this _______day of _______________2014.

FolioNo.

CDC Participant ID No.

CDC Account/Sub-Account No.

No. ofShares held

1. The Proxy must be a member of the Company.

2. The signature must tally with the specimen signature registered with the Company.

3. If a proxy is granted by a member who has deposited his/her shares into Central Depository Company of Pakistan Limited, the proxy must be accompanied with participant’s ID number and account/sub-account number along with attested photocopies of Computerized National Identity Card (CNIC) or the Passport of the beneficial owner. Representatives of corporate members should bring the usual documents required for such purpose.

4. The instrument of Proxy properly completed should be deposited at the Registered Office of the Company situated at Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi not less than 48 hours before the time of the meeting.

TO,THE COMPANY SECRETARYCENTURY PAPER & BOARD MILLS LIMITEDLAKSON SQUARE, BUILDING NO. 2,SARWAR SHAHEED ROAD, KARACHI-74200.

AFFIX CORRECT POSTAGEFo

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Fold Here

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Head Office, Registered Office,Corporate/Shares Office & Regional Sales Office (South)

Lakson Square, Building No.2, Sarwar Shaheed Road, Karachi - 74200, Pakistan.

Phone: (021) 35698000 Fax: (021) 35681163, 35683410

Regional Sales Office (North)14-Ali Block, New Garden Town, Lahore - 54600, Pakistan.

Phone: (042) 35886801-4 Fax: (042) 35830338

Mills62 KM, Lahore-Multan Highway, N-5, District Kasur, Pakistan.

Phone: (049) 4511464-5, 4510061-2 Fax: (049) 4510063

Email: [email protected]: www.centurypaper.com.pk

Century Paper & Board Mills Limited

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